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The Natural Gas Beast Cannot Be Tamed with 350 Rigs

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   |    Wednesday,May 15,2013

EIA has released natural gas production for February and there is still no decline in sight for gas production.  Based on the chart below, it could be assumed that gas production would follow gas rig count, but that is not the case. 

Rigs drilling for natural gas can be indicative of how companies feel about the economics of drilling for natural gas. The more gas rigs running indicates that companies are bullish about the natural gas environment.  

From the chart below, gas rig count has been in free fall since 2011 and into 2013.

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The chart below shows natural gas production (bcf/d) from the most recently released EIA data. 

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A few reasons why production has not seen the decline expected could be chalked up to the following reasons:

  • Producers has become much more efficient at producing gas with fewer rigs.
  • Rigs classified as drilling from Oil or NGL are actually drilling for dry gas
  • Rigs drilling for oil are not included in the gas rig count, even though oil wells produce associated gas.


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