NEW YORK (Dow Jones), Apr. 1, 2010
The number of rigs drilling for oil and gas in the U.S. climbed this week, bringing more gas supply to market despite low prices for the fuel.
The number of oil and gas rigs climbed to 1,465, up 21 rigs from the previous week, according to data from oil-field services company Baker Hughes Inc. The number of gas rigs was 949, an increase of eight rigs from last week, while the oil rig count was 502, an increase of 13 rigs. The number of miscellaneous rigs was unchanged at 14 rigs.
Gas production from onshore rock formations known as shales has surged with new drilling technology that makes it easier to extract gas from the dense rock. Shale formations, such as the Barnett Shale in Texas, have been largely credited with fueling a surge in domestic gas production. Producers must drill down to the rock, then horizontally through the formation, to break it apart and release the gas trapped within.
Although gas prices have fallen about 28% since the beginning of the year, production from shale reservoirs remains robust. In many shale formations, producers must drill by a certain date according to the terms of their leases.
Total gas in U.S. storage as of March 26 was 1.638 trillion cubic feet, about 10.8% above the five-year average. Natural gas for May delivery on the New York Mercantile Exchange was recently up 24 cents, or 6.2%, at $4.109 a million British thermal units.
Copyright (c) 2010 Dow Jones & Company, Inc.
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