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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:2,983 Points:768,410 Joined:Mar 2007	Message Posted: Jul 4, 2009 12:44:00 AM 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 4, 2009 12:43:41 AM 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 4, 2009 12:39:43 AM Ignore Pstreicher Report Abuse So, let's start using natural gas.
skybiker Champion Author South Carolina Posts:3,325 Points:659,305 Joined:Jul 2008	Message Posted: Jul 4, 2009 12:38:30 AM Ignore skybiker Report Abuse They will adjust their production in relation to the price....
JoeKR Champion Author New Jersey Posts:4,958 Points:1,108,335 Joined:Feb 2006	Message Posted: Jul 4, 2009 12:37:01 AM Ignore JoeKR Report Abuse The latest news may slow the rebound in drilling rigs.
rxman1 Champion Author Toledo Posts:4,335 Points:905,430 Joined:Nov 2007	Message Posted: Jul 4, 2009 12:35:39 AM Ignore rxman1 Report Abuse I wonder how many wells are kept out of production for the future.
TBONE3 Champion Author Pennsylvania Posts:3,870 Points:1,000,670 Joined:Mar 2005	Message Posted: Jul 4, 2009 12:30:46 AM 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 4, 2009 12:29:55 AM 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 4, 2009 12:28:33 AM 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:2,397 Points:1,614,860 Joined:May 2004	Message Posted: Jul 4, 2009 12:26:10 AM 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:7,963 Points:1,392,240 Joined:Mar 2006	Message Posted: Jul 4, 2009 12:23:17 AM 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:2,901 Points:716,975 Joined:Sep 2006	Message Posted: Jul 4, 2009 12:21:16 AM Ignore Fencemaker Report Abuse Natural gas oversupply? No, demand is low. Supply is not too high.
playtimeCLE Champion Author Cleveland Posts:3,175 Points:589,710 Joined:Nov 2008	Message Posted: Jul 4, 2009 12:20:32 AM Ignore playtimeCLE Report Abuse Well it is summer & were not heating our houses now...
DEG Champion Author Las Vegas Posts:12,803 Points:2,543,205 Joined:Jul 2003	Message Posted: Jul 4, 2009 12:18:42 AM 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:3,922 Points:874,815 Joined:Aug 2005	Message Posted: Jul 4, 2009 12:11:28 AM 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:4,278 Points:833,465 Joined:Aug 2007	Message Posted: Jul 4, 2009 12:08:22 AM Ignore ramboTX Report Abuse When prices are high, they will.
philthethrill Champion Author Hamilton Posts:3,189 Points:634,940 Joined:Nov 2008	Message Posted: Jul 4, 2009 12:07:30 AM Ignore philthethrill Report Abuse interesting
CobraLeader Champion Author New Jersey Posts:247,775 Points:1,131,700 Joined:Apr 2007	Message Posted: Jul 4, 2009 12:07:02 AM Ignore CobraLeader Report Abuse Is this just a normal cycle?
52MPG Champion Author Dayton Posts:2,303 Points:767,110 Joined:Apr 2006	Message Posted: Jul 4, 2009 12:06:42 AM 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 4, 2009 12:06:39 AM 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:4,097 Points:1,498,140 Joined:Mar 2005	Message Posted: Jul 4, 2009 12:06:19 AM Ignore Toppers Report Abuse They may want to be reconsidering...
mreMN Veteran Author Twin Cities Posts:394 Points:172,400 Joined:Oct 2008	Message Posted: Jul 4, 2009 12:04:13 AM Ignore mreMN Report Abuse Thats a big increase within a month.
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:436,495 Joined:Mar 2008	Message Posted: Jul 4, 2009 12:01:57 AM 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 11:59:04 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:4,033 Points:779,335 Joined:May 2008	Message Posted: Jul 3, 2009 11:57:05 PM Ignore nedthenanite Report Abuse Hmm.
Jarod13 Champion Author Virginia Posts:2,875 Points:638,300 Joined:Oct 2008	Message Posted: Jul 3, 2009 11:56:25 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:3,203 Points:657,530 Joined:Oct 2008	Message Posted: Jul 3, 2009 11:55:13 PM Ignore Wizrd03 Report Abuse Oil prices are high enough to make driling profitable
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:436,495 Joined:Mar 2008	Message Posted: Jul 3, 2009 11:53:22 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 11:49:40 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:4,078 Points:995,510 Joined:Dec 2005	Message Posted: Jul 3, 2009 11:46:46 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:3,561 Points:1,062,830 Joined:Oct 2006	Message Posted: Jul 3, 2009 11:42:44 PM Ignore zeddieiv Report Abuse cool
OKRifle Champion Author Oklahoma City Posts:4,855 Points:845,070 Joined:Oct 2007	Message Posted: Jul 3, 2009 11:42:24 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:3,790 Points:1,582,765 Joined:Jun 2004	Message Posted: Jul 3, 2009 11:37:20 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:1,610 Points:731,200 Joined:Jul 2007	Message Posted: Jul 3, 2009 11:37:07 PM Ignore kingpin6 Report Abuse Wow! What news!
jimshell Champion Author Pennsylvania Posts:1,830 Points:463,320 Joined:Sep 2004	Message Posted: Jul 3, 2009 11:36:43 PM Ignore jimshell Report Abuse Drilling may help.
mplato Champion Author Columbia Posts:4,226 Points:1,013,635 Joined:Jun 2004	Message Posted: Jul 3, 2009 11:33:06 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 11:22:11 PM Ignore akeatts Report Abuse Conserve!
phurburger Champion Author Atlanta Posts:2,555 Points:530,670 Joined:Oct 2005	Message Posted: Jul 3, 2009 11:16:04 PM Ignore phurburger Report Abuse Drill here, drill now. Drill baby, drill.
LetemEatCake Champion Author Oklahoma City Posts:2,800 Points:436,495 Joined:Mar 2008	Message Posted: Jul 3, 2009 11:11:02 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 11:05:16 PM Ignore Ruffnecks_wife Report Abuse Rebounding? What a joke, at least not here in Utah!
Romey08 Champion Author Virginia Posts:1,919 Points:566,350 Joined:Apr 2008	Message Posted: Jul 3, 2009 11:04:33 PM Ignore Romey08 Report Abuse Looking to gain some profit
mike911 Champion Author Detroit Posts:3,889 Points:1,206,490 Joined:Jan 2007	Message Posted: Jul 3, 2009 11:02:43 PM Ignore mike911 Report Abuse Price fixing at its best!
JohnJ55 Champion Author Dayton Posts:2,016 Points:959,920 Joined:Jul 2007	Message Posted: Jul 3, 2009 11:02:27 PM Ignore JohnJ55 Report Abuse many can only afford to drill when prices are up
remay Champion Author Houston Posts:2,217 Points:1,152,940 Joined:May 2006	Message Posted: Jul 3, 2009 11:02:24 PM Ignore remay Report Abuse a small step in the right direction...
hibsaw Champion Author Mississippi Posts:3,103 Points:714,050 Joined:Feb 2008	Message Posted: Jul 3, 2009 10:58:50 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:3,322 Points:589,660 Joined:Dec 2008	Message Posted: Jul 3, 2009 10:55:33 PM Ignore hybridaholic Report Abuse Every cloud has a silver lining for the gas and oil companies
ThatHunt Champion Author Dallas Posts:2,585 Points:1,221,730 Joined:Jul 2006	Message Posted: Jul 3, 2009 10:50:50 PM Ignore ThatHunt Report Abuse Let's switch to natural gas on city buses and other public transportation.
roadrunnerMO Champion Author Kansas Posts:3,416 Points:730,370 Joined:Jul 2008	Message Posted: Jul 3, 2009 10:36:57 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 10:31:02 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 10:29:57 PM Ignore JayMac08 Report Abuse Just doing business for a profit.
TopGunn Champion Author Baltimore Posts:4,224 Points:1,636,735 Joined:Aug 2004	Message Posted: Jul 3, 2009 10:28:22 PM Ignore TopGunn Report Abuse Seems ALL energy revolves around net profit.
sillywagon Champion Author New York Posts:5,246 Points:527,495 Joined:Oct 2008	Message Posted: Jul 3, 2009 10:28:11 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?