"Pulling from the publicly available data at Baker Hughes, I have created a set of graphs using the latest (9/30/2011) rig count data and oil/gas rig count splits. I think it is interesting to note just how far up (in percentage terms) the oil drilling activity has come, despite the massive investments in natural gas shale drilling over the past few years.

"As I've noted in previous posts, the rapid depletion rates in shale plays (often up to 10x faster than conventional wells) results in the need for significantly more drilling and workovers, while the ability to drill 8-16 (sometimes less or more) horizontal "wells" from a single drill site effectively increases the productivity of a single rig.

"It is also interesting to note that the horizontal drilling percentage curve is beginning to flatten - the implications of this need more research... but I'm betting that is indicating some success by the anti-fracking coalitions and the general anti-drilling attitude of the US government (and possibly other factors).

"Have a great weekend!"

Eoin Treacy's view Thank you for these educational charts contributed in the spirit of Empowerment Through Knowledge. The ratio of West Texas Intermediate crude oil to Henry Hub natural gas remains at an historically elevated level. While it is looking more likely that it has hit a medium-term peak, the ratio effectively illustrates the relative attractiveness of oil exploration versus natural gas.

While shale gas remains the focus of investor attention, shale oil is a high growth sector in the USA and holds significant potential for producers given the fungible nature of crude oil and the higher price structure. (Also see Comment of the Day on February 10th).