Internal rates of return have fallen this month across both oil and dry gas basins in the US, yet the rig count has increased steadily throughout December despite lower commodity prices.

The average 12-month forward curve for the US domestic crude price benchmark, West Texas Intermediate, decreased by $4.93/b in December, to $70.29/b. Returns within the major oil basins fell as a result. Three plays, the Permian Delaware, Eagle Ford, and Bakken, hold IRRs just below 50%, according to S&P Global Platts Analytics. The dry gas basins also declined this month, as the average 12-month forward curve for Henry Hub settled at $3.74/MMBtu, a decrease of 40 cents/MMBtu. The Marcellus Wet has the highest return of any of the gas basins at 45% IRR. The Utica Dry, Marcellus Dry and Haynesville are all above 30% […]