Tier 1 rigs continue to work while older tier 2 and 3 rigs are being scrapped. Tier 1 can drill the same well in half the time and bore more lateral and longer horizontal sections underground.
Tier 1 Pad-optimal rigs are at the top of the demand list. Pad-optimal rigs have the following: dual-fuel capabilities, 7,500-psi mud pump system, omnidirectional walking legs capable of fast conventional moves, and 1,500 hp AC drives. Rigs with these characteristics will be the first to achieve 100% utilization.
There are around 700 rigs running 1,500 horsepower but only about 50% are pad-optimal. Most of these are already contacted to oil producers.
If things don't change soon, gas production will likely drop like a stone as demand for pad-optimal rigs goes beyond supply.
Rising gas prices will cause an increased demand for Chesapeake shares, especially under $10. I see a strong desire by institutions to accumulate cheap shares building rapidly along with a very limited desire to sell by other institutions. Only a fool would dump Chesapeake under $15.
Of course some of you will think this is only hype, especially those that have read all the negativity put out by the shorts. I don't recall ever seeing so many negative reports on one stock in the last 30 years. All this bad publicity has had a disastrous effect on CHK share price. Chesapeake is right now a $10 stock that has been beaten into the ground! This is what makes it so attractive. This is bottom fishing at its finest.
