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New Report Addresses Flaws In Rig Count

Corey Paul | OA Online

Oct 23, 2013

A simple rig count no longer reflects the level of productivity in the county’s six major oil and gas formations, so the Department of Energy on Tuesday released a new study that it says will offer a clearer picture of the national energy renaissance.

The Drilling Productivity Report uses other data — rig efficiency, new well productivity, well declines and overall production trends — to buttress rig counts. Rig counts are a longtime indicator of production but have become muddled in recent years by the adoption of horizontal drilling and hydraulic fracking techniques, which have unlocked vast reserves in previously uneconomical rock formations throughout the United States.
Horizontal drilling rigs are more costly than conventional drilling rigs but they yield more productive wells. The number of overall drilling rigs lessens as a result.

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