It's almost a cliche to note that liquids rich plays are booming these days. So it comes as no surprise that rig counts in five such plays, including the legendary Bakken Shale oil field in North Dakota and Montana, hit record levels last week, according to investment bank Global Hunter Securities. Global Hunter uses both the Baker Hughes rig count and its own estimates to calculate the rigs working in assorted US plays.
Oil has fallen from levels well in excess of $100/b earlier in the year, but it is still above the comfortable $80/b needed to make many or most unconventional plays economic. Just as the Romans urged "carpe diem" ("seize the day") so their citizens would make the most of the present, many oil operators, overrun with exploitation opportunities, seemed to carpe shale in recent conference calls as they announced plans to direct higher capital spending this year into liquids plays.
"Several operators are running their most active rig programs we have on record," GHS said in a September 2 report.
Carpe, at least according to Wikipedia, means literally "to pick, pluck, pluck off, cull, crop, gather." The Roman poet Horace urged that "now" be seized because the future is not knowable, so one should live in the moment and enjoy the very near term.
To look at the rig counts in most unconventional oil and liquids plays, it looks like the carpe spirit is alive and well in the oil patch. The Bakken's rig count reached 181 for the week ended September 2, GHS said, increasing by one as activity continued to recover following severe flooding in some parts of the play a few months ago. That compares to an average 154 rigs in second-quarter 2011, 131 rigs in fourth-quarter 2010 and 71 rigs in first-quarter 2010.
But other less prominent plays such as the Granite Wash in western Oklahoma/Texas Panhandle, and even emerging plays such as the Bone Spring in west Texas and the Mississippian in northern Oklahoma, not only gained ground last week; they hit record highs.
According to GHS, the rig count for the Granite Wash, an oil and natural gas play, jumped by five to 95 last week. This compares to an average of 80 in the second quarter, 60 in fourth-quarter 2010 and 26 in first-quarter 2010.
In the emerging Bone Springs/Avalon play the rig count inched up two to 56 rigs, versus an average 42 rigs in the second quarter and 33 rigs in fourth-quarter 2010. Meanwhile, rigs in the Mississippian rose by three to 36 rigs, versus 20 in the second quarter and 12 in fourth- quarter 2010.
Where does it end? As recently as a few years ago, the number of proven shale plays was fairly limited to the Barnett in north Texas, the Fayetteville in northwest Arkansas and the Haynesville in east Texas/northwest Louisiana. And these were largely natural gas fields, although the Barnett has an oil window at its northern rim.
Now, however, viable unconventional fields are numerous and increasing all the time. And many contain the triple bonanza of oil/natural gas/gas liquids which makes them wildly economic. Just weeks ago many oil companies said they are leasing or testing a crop of embryo plays which look promising, including the Tuscaloosa Marine Shale in Louisiana/Mississippi, the Utica Shale in eastern Ohio and the Lower Smackover/Brown Dense play in southern Arkansas and northern Louisiana.
And there's sure to be more as these ventures breed new ideas that can be applied to still other fields. With natural gas so plentiful (thanks to shale) that importers are now petitioning the US government to export it, and liquids on a roll, carpe shale seems destined to stick around for more than just a diem.
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