There were no rigs operating in Arkansas through the end of March, a level of inactivity not seen since the fourth quarter of 2002 when rig activity came to a halt or fell to near-zero levels for several weeks. The last time there was drilling activity in Arkansas came during the last week of 2015, before Fayetteville Shale leader Southwestern Energy took its final two rotary rigs offline.
While Southwestern, BHP Billiton and other Fayetteville Shale operators have expressed confidence in the production capacity of the unconventional shale play across several counties in central and Northwest Arkansas, most drillers have furloughed or moved rig crews to other oil-rich shale plays until natural gas futures move above the $3 per million British thermal unit (MMBtu) break-even level.
And although natural gas prices are up 14% in March, industry analysts say domestic stockpiles are still too high to support any brisk drilling activity. On Thursday, natural gas futures for May delivery settled at $1.96 per MMBtu on the New York Mercantile Exchange, down 2% or 3.7 cents.
Nationwide, the U.S. rig count is down 14 rigs from last week to 450, with oil rigs down 10 to 362, and gas rigs down four to a disappointing 88. Compared to a year ago when there were 1,028 rigs online, there were 578 fewer rigs in operation at the end of March. Oil rigs are down by 440, gas rigs are off by 134, and miscellaneous rigs are by four.
Texas leads the nation with 204 oil and gas rigs still online, followed by Oklahoma with 61, Louisiana at 47, North Dakota with 29, and Pennsylvania and Colorado at 17.