According to the October 24th Baker Hughes rig count report, there are 52 rigs in PA and 44 rigs in OH. PA has 47 rigs in the Marcellus and 5 in the Utica while all the rigs in OH are in the Utica. I think the rig count in PA is under reported because E&P Companies are drilling in the Devonian Shale, but Baker Hughes is not reporting those rigs. PA could have a few more rigs.
What is difficult to understand is the permitting activity in PA versus OH. There is considerably more activity in PA than in OH. PA is averaging between 30 to 40 permits per week. OH has between 5 and 15. We know that the drilling in PA has become incredibly efficient. For instance, PA is producing 20% more nat gas in 2014 than it did in 2013. Last year this time there were 57 rigs in the Marcellus and 2 in the Utica. This past week the count was 49 in the Marcellus and 5 in the Utica.
One has to wonder if the election has any impact on the rig count in PA. It looks like Tom Wolf, the Democratic gubernatorial candidate, will win in PA. Wolf has taken aim at the E&P Companies and wants to institute a severance tax. Will the Wolf potential win impact the PA rig count? Could rigs be moving to OH and/or WV if he wins?
We’ll closely monitoring the rig activity and will providing you with our perspective on the activity.