US gas wells see over 5% growth

Despite low natural gas prices, economic and regulatory uncertainty, and a large shift in rigs toward oil-directed drilling, the number of producing natural gas wells in the United States increased by 5.6% last year. The gas well count gained 24,448 wells to end 2009 with a total of 458,376 wells, up from 433,928 in 2008.

The biggest well gains came in five states: Wyoming (5,163), Texas (5,039), Pennsylvania (3,936), Oklahoma (3,736) and West Virginia (3,436). These states represent about 87% of the total increase in producing gas wells in the US. The increases come primarily from unconventional resource plays: the Marcellus Shale in Pennsylvania and West Virginia, the Haynesville and Barnett Shales in Texas, the Woodford Shale in Oklahoma, and the Powder River Basin coalbed methane play in Wyoming. Based on comparison of the well increases with estimated wells drilled in 2009, it appears that many of these wells were drilled in 2008 when gas prices were averaging $9.12 per Mcf (Henry Hub), and were brought online last year to fill new pipeline capacity, despite the fact that prices had dropped by more than half to a 2009 average of $4.06.

Texas kept its title as the state with the most gas producers, totaling 93,507. District 6, in East Texas, still leads the state in gas wells with 15,468, 7.2% more than in 2008. Wells in District 6 target traditional tight gas and, increasingly, Haynesville Shale resources. District 9, in the Barnett, gained more than 2,600 wells to earn the No. 2 spot, with a total of 14,366 gas wells.

Pennsylvania and West Virginia continue to hold second and third place, respectively. Pennsylvania had a well total of 56,636 wells at year-end 2009, and West Virginia had 50,602. Oklahoma maintained its fourth-place position with 43,580 wells, and Ohio was once again fifth with just under 35,000 wells, having gained 107 during the year.

Wyoming’s big well gains—the highest in the US—allowed it to surpass Colorado as the state with the sixth-highest number of gas wells, totaling 32,568. Activity in the San Juan Basin of New Mexico and Colorado has cooled off in the last couple of years, but both states still saw well gains—489 in New Mexico and 1,625 in Colorado—to land in sixth and seventh place, respectively.

Only seven states saw decreases in their gas well counts last year, the same number as in 2008. This time, the biggest losses were in Louisiana (down 353 wells) and Arkansas (down 329 wells), both of which had seen large gains in their well counts the year before. Louisiana’s losses were concentrated in its South district, which lost 589 wells, further solidifying the North district’s position as the dominant hydrocarbon area in the state. Lousiana also saw a 51-well loss in its state-owned waters. Other losses were in Mississippi (down 50), Indiana (down 15), New York (down eight), North Dakota (down eight) and Alaska (down six).

In the federal waters of the Gulf of Mexico, the well count saw a big decrease of 603 gas wells, or nearly 25%, for a 2009 total of 1,850 gas wells.