The sound of humming drill rigs has been tapering off lately. It’s been happening for a while, but this year, the industry is going through a particularly rough patch. Drillers are laying off workers and cutting spending in the face of low natural gas prices.
One prime example is Cabot Oil and Gas. Earlier this month, the company announced plans to cut its 2016 capital budget by 58 percent compared to last year. It’s also scaling back to operate just one rig. That’s a pretty big deal, according to Stephen Beck, who analyzes U.S. oil and gas plays for IHS.
“The noteworthy thing about Cabot is that it’s located in some of the best areas of the Marcellus in northeast Pennsylvania,” he says. “The wells in these areas are some of the most economic wells in the Marcellus.”
Other major companies have also announced cuts this year. Southwestern Energy laid off nearly 40 percent of its workforce—including about 200 workers in Appalachia. Range Resources recently cut 55 jobs, and Chesapeake Energy saw its stock plummet as it fended off bankruptcy rumors after hiring a restructuring firm.