In the unconventional gas resource era, falling rig counts no longer mean declining production, and the traditional rig count no longer tells the tale of where the industry and the market are going, according to Bentek Energy LLC.
"It takes far fewer rigs in today's environment to accomplish what the historical rig count used to do," said Bentek's Tom Sherman, a senior energy analyst. "With the efficiency gains per rig that we are seeing in today's rig fleet, production can remain flat or even increase with a rig count that is 50% less than what it was last year."
"Perhaps more importantly, the volume of natural gas production per well is dramatically higher today compared to levels seen only two years ago," Bentek said in a Market Alert released Wednesday. "Today, initial production rates have climbed to an average of 2.2 MMcf/d in the Green River/Overthrust compared to about 1.5 MMcf/d two years ago."
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