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Oilfield Activity May Be Rebounding

Forbes -- Jesse Bogan, 06.30.09, 08:45 PM EDT
Rig count rises slightly on upturn in oil prices, but natural gas drilling continues to fall.

HOUSTON -- After months of decommissioning drilling rigs to balance out lower energy prices and expensive well service costs, mass amputations appear to be over in the oilfield due to a rebound in prices.

However, the natural gas sector continues to drown in oversupply.

The national oil and gas rig count has been slashed in half since last summer's highs. But since June 5, the number of oil rigs in production has climbed from 179 to 219, according to a weekly count by Baker Hughes, mainly due to small "checkbook" exploration and production companies getting back into the game.

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Submitted Jul 03, 2009 By: LetemEatCake

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Blue_Cruzer Champion Author Lexington Posts:2,807 Points:733,785 Joined:Mar 2007	Message Posted: Jul 3, 2009 9:44:00 PM Ignore Blue_Cruzer Report Abuse Why hasn't the price of natural gas dropped to the consumer?
FuelRacer1132 All-Star Author Iowa Posts:656 Points:159,890 Joined:May 2007	Message Posted: Jul 3, 2009 9:43:41 PM Ignore FuelRacer1132 Report Abuse Let me understand, lower price, less drilling. Higher pricing, more rigs a runnin'. Do the sheeple understand what is going on here?
Pstreicher All-Star Author Tampa Posts:812 Points:289,440 Joined:Oct 2007	Message Posted: Jul 3, 2009 9:39:43 PM Ignore Pstreicher Report Abuse So, let's start using natural gas.
skybiker Champion Author South Carolina Posts:3,182 Points:627,685 Joined:Jul 2008	Message Posted: Jul 3, 2009 9:38:30 PM Ignore skybiker Report Abuse They will adjust their production in relation to the price....
JoeKR Champion Author New Jersey Posts:4,806 Points:1,082,745 Joined:Feb 2006	Message Posted: Jul 3, 2009 9:37:01 PM Ignore JoeKR Report Abuse The latest news may slow the rebound in drilling rigs.
rxman1 Champion Author Toledo Posts:4,147 Points:870,055 Joined:Nov 2007	Message Posted: Jul 3, 2009 9:35:39 PM Ignore rxman1 Report Abuse I wonder how many wells are kept out of production for the future.
TBONE3 Champion Author Pennsylvania Posts:3,693 Points:966,045 Joined:Mar 2005	Message Posted: Jul 3, 2009 9:30:46 PM Ignore TBONE3 Report Abuse I don't think anyone really knows what the oil producers will do at any given time. Oh excuse me, EXCEPT TO RAISE PRICES OR CUT PRODUCTION AND THEN RAISE PRICES.
djoumy All-Star Author New York Posts:872 Points:385,950 Joined:Sep 2008	Message Posted: Jul 3, 2009 9:29:55 PM Ignore djoumy Report Abuse why they don't stop doubling their profit?
comet64 Champion Author Illinois Posts:1,250 Points:258,825 Joined:Feb 2006	Message Posted: Jul 3, 2009 9:28:33 PM Ignore comet64 Report Abuse it is a bad circle if we use more natural gas than natural gas price will raise/ We can't win either way we go.
BWD Champion Author Charleston Posts:2,217 Points:1,579,260 Joined:May 2004	Message Posted: Jul 3, 2009 9:26:10 PM Ignore BWD Report Abuse Oil companies rake in record profits but don't have enough money for rigs...come on now!
humblepie Champion Author Toledo Posts:7,750 Points:1,357,615 Joined:Mar 2006	Message Posted: Jul 3, 2009 9:23:17 PM Ignore humblepie Report Abuse all energy cost are going up not down cap and trade will drive the driller out of business and overseas then we will be in a ton of road apples
Fencemaker Champion Author Pittsburgh Posts:2,869 Points:697,965 Joined:Sep 2006	Message Posted: Jul 3, 2009 9:21:16 PM Ignore Fencemaker Report Abuse Natural gas oversupply? No, demand is low. Supply is not too high.
playtimeCLE Champion Author Cleveland Posts:3,009 Points:556,215 Joined:Nov 2008	Message Posted: Jul 3, 2009 9:20:32 PM Ignore playtimeCLE Report Abuse Well it is summer & were not heating our houses now...
DEG Champion Author Las Vegas Posts:12,634 Points:2,509,575 Joined:Jul 2003	Message Posted: Jul 3, 2009 9:18:42 PM Ignore DEG Report Abuse A glut in natural gas? Yet, Southwest Gas in Nevada wants to increase the cost to the consumers.
WIPACKERFAN Champion Author Chicago Posts:3,753 Points:840,435 Joined:Aug 2005	Message Posted: Jul 3, 2009 9:11:28 PM Ignore WIPACKERFAN Report Abuse This is price manipulation at it's finest. You think that we are naive to believe otherwise?
ramboTX Champion Author Dallas Posts:4,101 Points:798,840 Joined:Aug 2007	Message Posted: Jul 3, 2009 9:08:22 PM Ignore ramboTX Report Abuse When prices are high, they will.
philthethrill Champion Author Hamilton Posts:3,028 Points:604,115 Joined:Nov 2008	Message Posted: Jul 3, 2009 9:07:30 PM Ignore philthethrill Report Abuse interesting
CobraLeader Champion Author New Jersey Posts:235,160 Points:1,097,075 Joined:Apr 2007	Message Posted: Jul 3, 2009 9:07:02 PM Ignore CobraLeader Report Abuse Is this just a normal cycle?
52MPG Champion Author Dayton Posts:2,125 Points:732,635 Joined:Apr 2006	Message Posted: Jul 3, 2009 9:06:42 PM Ignore 52MPG Report Abuse Up Down Up Down Is this a yo-yo?
PioneerUrban Champion Author West Virginia Posts:2,698 Points:532,505 Joined:Jun 2008	Message Posted: Jul 3, 2009 9:06:39 PM Ignore PioneerUrban Report Abuse We still need to continue to explore and develop our own resources in America, so we don't send our dollars to OPEC
Toppers Champion Author Atlanta Posts:3,927 Points:1,462,965 Joined:Mar 2005	Message Posted: Jul 3, 2009 9:06:19 PM Ignore Toppers Report Abuse They may want to be reconsidering...
mreMN Veteran Author Twin Cities Posts:394 Points:169,950 Joined:Oct 2008	Message Posted: Jul 3, 2009 9:04:13 PM Ignore mreMN Report Abuse Thats a big increase within a month.
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:425,645 Joined:Mar 2008	Message Posted: Jul 3, 2009 9:01:57 PM Ignore LetemEatCake Report Abuse Ken2OD from Michigan... The author needs to do no more research. He is working from the premise that the reader understands things such as 'rig count' or will Google it if they don't. May I suggest for further clarification. you Google the Weekly Rig Count by state and then by US. Each state and nationally the rig count is published weekly. Includes the whole enchilada. [Edited by: LetemEatCake at 7/4/2009 12:02:26 AM EST]
korklenut All-Star Author Tacoma Posts:755 Points:153,655 Joined:Mar 2009	Message Posted: Jul 3, 2009 8:59:04 PM Ignore korklenut Report Abuse If the price of oil drops $10; do they pull their rigs? I doubt it.
nedthenanite Champion Author Mississippi Posts:3,853 Points:744,710 Joined:May 2008	Message Posted: Jul 3, 2009 8:57:05 PM Ignore nedthenanite Report Abuse Hmm.
Jarod13 Champion Author Virginia Posts:2,741 Points:606,870 Joined:Oct 2008	Message Posted: Jul 3, 2009 8:56:25 PM Ignore Jarod13 Report Abuse We need to continue drilling, but we need to start increasing our usage of alternative/renewable fuels if we're ever going to become an energy independent nation. We can't continue to kept hostage by OPEC!
Wizrd03 Champion Author Illinois Posts:3,033 Points:623,880 Joined:Oct 2008	Message Posted: Jul 3, 2009 8:55:13 PM Ignore Wizrd03 Report Abuse Oil prices are high enough to make driling profitable
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:425,645 Joined:Mar 2008	Message Posted: Jul 3, 2009 8:53:22 PM Ignore LetemEatCake Report Abuse mplato and phurburger... Hey, I am up for your drilling mantra; it will do nothing but make the very sreong OK economy even better. We have one of the lowest unemployment rates in the US now. BUT, are you willing to sing your mantra when OIL doubles in price? Think about it!
greatscot08 All-Star Author Columbus Posts:944 Points:187,460 Joined:Jun 2008	Message Posted: Jul 3, 2009 8:49:40 PM Ignore greatscot08 Report Abuse It would seem logical (I know...what does logic have to do with oil prices?) .....but anyway, it would seem logical that domestically produced crude oil should be cheaper than shipping it halfway around the world from the Middleast ....of course our oil here has to contend with all the government controls and court ordered sanction instigated by all the tree-huggers, NIMBYs and CAVE people (that's Citizens Against Virtually Everything)......after all that the additional costs probably do make it difficult to be competitive.....
Ken2OD Champion Author Grand Rapids Posts:3,897 Points:959,910 Joined:Dec 2005	Message Posted: Jul 3, 2009 8:46:46 PM Ignore Ken2OD Report Abuse This story could be misleading. Where are these oil rigs located? Are they only in Texas or all over the USA, including Alaska? What about those small mom & pop rocker-arm type oil pumps that are located in Michigan and in other states as well? I think more research should have been done by this writer. [Edited by: Ken2OD at 7/3/2009 11:48:38 PM EST]
zeddieiv Champion Author Columbia Posts:3,451 Points:1,031,755 Joined:Oct 2006	Message Posted: Jul 3, 2009 8:42:44 PM Ignore zeddieiv Report Abuse cool
OKRifle Champion Author Oklahoma City Posts:4,679 Points:811,420 Joined:Oct 2007	Message Posted: Jul 3, 2009 8:42:24 PM Ignore OKRifle Report Abuse Natural gas is a great competitive alternative...presently! We need the mix, if more stations would offer it!
rjoeh Champion Author Michigan Posts:3,686 Points:1,561,535 Joined:Jun 2004	Message Posted: Jul 3, 2009 8:37:20 PM Ignore rjoeh Report Abuse Hey... it may be more profitable to drill... and you can not make profits without product to sell.
kingpin6 Champion Author Arkansas Posts:1,490 Points:699,300 Joined:Jul 2007	Message Posted: Jul 3, 2009 8:37:07 PM Ignore kingpin6 Report Abuse Wow! What news!
jimshell Champion Author Pennsylvania Posts:1,787 Points:443,585 Joined:Sep 2004	Message Posted: Jul 3, 2009 8:36:43 PM Ignore jimshell Report Abuse Drilling may help.
mplato Champion Author Columbia Posts:4,102 Points:988,780 Joined:Jun 2004	Message Posted: Jul 3, 2009 8:33:06 PM Ignore mplato Report Abuse drill....drill....drill drill here drill now
akeatts Champion Author Tennessee Posts:1,343 Points:271,000 Joined:Aug 2008	Message Posted: Jul 3, 2009 8:22:11 PM Ignore akeatts Report Abuse Conserve!
phurburger Champion Author Atlanta Posts:2,555 Points:530,670 Joined:Oct 2005	Message Posted: Jul 3, 2009 8:16:04 PM Ignore phurburger Report Abuse Drill here, drill now. Drill baby, drill.
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:425,645 Joined:Mar 2008	Message Posted: Jul 3, 2009 8:11:02 PM Ignore LetemEatCake Report Abuse sillywagon from New York... A very good question! If you do not count the current marginal wells which have been shut down as a result of low prices (and can be started again if profit is there)....new OIL is harder to find and extract, just as water wells are having to go deeper to find water. In many cases, the Oil companies have already picked the 'low hanging fruit'. New technology has expanded the search for Oil...but it is not cheap. Examples would be offshore drilling, much greater depths needed to extract. Slant drilling, expensive. Oil/Tar Sands extraction, strip mining and any heat extraction of Oil in the Green River Formation and the Bakken formations I am sure I am missing some, but this is the general idea. Associated with the new technology extraction, of course, is the need for huge amount of water and power. In many areas of the West, these are simply not available without a magic or expensive wand. We have not even touched on the environmental remediation needed in these areas, or the potential environmental damage. And, why it is much cheaper to import Oil from, for example Canada, than do it ourselves. Taint' pretty, but Oil will have to be, depending on the estimate, between $100-200/barrel to make some of this extraction pay for Big Oil. [Edited by: LetemEatCake at 7/3/2009 11:11:31 PM EST]
Ruffnecks_wife Champion Author Utah Posts:5,536 Points:504,610 Joined:Sep 2005	Message Posted: Jul 3, 2009 8:05:16 PM Ignore Ruffnecks_wife Report Abuse Rebounding? What a joke, at least not here in Utah!
Romey08 Champion Author Virginia Posts:1,744 Points:532,495 Joined:Apr 2008	Message Posted: Jul 3, 2009 8:04:33 PM Ignore Romey08 Report Abuse Looking to gain some profit
mike911 Champion Author Detroit Posts:3,734 Points:1,176,515 Joined:Jan 2007	Message Posted: Jul 3, 2009 8:02:43 PM Ignore mike911 Report Abuse Price fixing at its best!
JohnJ55 Champion Author Dayton Posts:1,827 Points:924,570 Joined:Jul 2007	Message Posted: Jul 3, 2009 8:02:27 PM Ignore JohnJ55 Report Abuse many can only afford to drill when prices are up
remay Champion Author Houston Posts:2,037 Points:1,118,090 Joined:May 2006	Message Posted: Jul 3, 2009 8:02:24 PM Ignore remay Report Abuse a small step in the right direction...
hibsaw Champion Author Mississippi Posts:2,925 Points:679,425 Joined:Feb 2008	Message Posted: Jul 3, 2009 7:58:50 PM Ignore hibsaw Report Abuse Go punch some more holes. The more we drill here the less dependent we are on OPEC.
hybridaholic Champion Author Wisconsin Posts:3,153 Points:555,235 Joined:Dec 2008	Message Posted: Jul 3, 2009 7:55:33 PM Ignore hybridaholic Report Abuse Every cloud has a silver lining for the gas and oil companies
ThatHunt Champion Author Dallas Posts:2,423 Points:1,188,530 Joined:Jul 2006	Message Posted: Jul 3, 2009 7:50:50 PM Ignore ThatHunt Report Abuse Let's switch to natural gas on city buses and other public transportation.
roadrunnerMO Champion Author Kansas Posts:3,240 Points:694,995 Joined:Jul 2008	Message Posted: Jul 3, 2009 7:36:57 PM Ignore roadrunnerMO Report Abuse Supply will eventually be outstripped by demand as the economy rebounds; then they will really stick it to us on price.
TomT2Lee Champion Author Cincinnati Posts:3,470 Points:1,091,790 Joined:Sep 2005	Message Posted: Jul 3, 2009 7:31:02 PM Ignore TomT2Lee Report Abuse Even if the activity is recovering, which I seriously doubt, the damage has already been done. They time lost is not linear, but compounded. If you go study the supply vs demand charts you will see the deficit starting to build.
JayMac08 Champion Author Jackson Posts:3,386 Points:205,430 Joined:Oct 2008	Message Posted: Jul 3, 2009 7:29:57 PM Ignore JayMac08 Report Abuse Just doing business for a profit.
TopGunn Champion Author Baltimore Posts:4,049 Points:1,602,110 Joined:Aug 2004	Message Posted: Jul 3, 2009 7:28:22 PM Ignore TopGunn Report Abuse Seems ALL energy revolves around net profit.
sillywagon Champion Author New York Posts:5,145 Points:514,395 Joined:Oct 2008	Message Posted: Jul 3, 2009 7:28:11 PM Ignore sillywagon Report Abuse Why has oil and natural gas exploration become so expensive in the last few years? Previous to a few years ago we didn't see $50 a barrel oil, no where near $75 or $147 a barrel. How were these companys able to make a profit in the past, but not now?