The liquids rich Midcontinent may be on the verge of a 2012 breakout in activity as oil and gas operators continue their two-year long pivot away from natural gas.

Apache’s acquisition of Cordillera Energy Partners will bring renewed activity to the western Anadarko Basin stacked formation play encompassing the Granite Wash, Marmaton, Cleveland and Tonkawa sands. Last week’s conference call on the acquisition indicated rig count for Apache would rise to 25 units in 2012, or a net gain of 7 rigs over what each company is currently running in the area.

If Apache’s 220-well effort pans out in 2012, the Houston-based super-independent will spend close to $1 billion in the western Anadarko Basin.

Similar news is unfolding in the Mississippi Lime. Oil and gas operators have created a number of funding mechanisms ranging from joint ventures to drilling trusts to underwrite oil and gas activity going forward. SandRidge Energy, for example, will spend more than $1.5 billion from outside funding in the Mississippi Lime during the next three years.

Consequently the Mississippi Lime, which currently has 30 rigs drilling horizontally for oil, is due for a 2012 breakout that could add more than 20 additional rigs by year-end. The play appears to be expanding farther to the east along the Kansas/Oklahoma border and moving farther north into Kansas. Chesapeake, for example, just added a rig drilling Mississippi Lime targets in Kiowa County, Kan., last week.

But the kicker is found in a series of numerical jolts in industry tracking statistics. Sharp changes appeared in the weekly statistics as of the Jan. 27, 2012, sample date. First, the Hart Unconventional Activity Tracker recorded a 41-rig drop in horizontal gas drilling to just 439 rigs active.

A deep dive into the numbers soon leads to Chesapeake Energy Corp., which last week announced a two-dozen rig drop in gas drilling activity by mid-year 2012. Chesapeake plans to have six rigs each running in the Haynesville and Barnett shales and just 12 in the dry gas portion of the Marcellus.

As it turns out, Chesapeake is well along the way to meeting those goals. Hart found nine Chesapeake rigs turning to the right in the Haynesville shale last week, and eight running in the Barnett. As a result, the four core Haynesville parishes in Louisiana dropped below 40 active rigs for the first time since November 2008.

Similarly, rig count fell below 50 units in the Barnett shale, though the region was beset with heavy rains last week.

As noted last week, Chesapeake already made substantial cuts in those basins in the last quarter of 2011. Some of those cutbacks are related to joint ventures winding down with Plains Exploration & Production Inc. and Statoil from 2008.

Chesapeake originally projected its Haynesville rig count would reach 60 units by the end of 2010 compared with nine currently and six by mid-year 2012.

Drilling carries comprised the major portion in those joint venture arrangements as Chesapeake sought to fund its wild scramble to capture acreage in the dry gas shale plays during the Shale Fever Era in 2008. As those joint ventures near completion, Chesapeake has less money to continue dry gas drilling programs, which are clearly uneconomic at present gas prices.

The bigger question has been whether Chesapeake is going to cut back on overall rig count or simply re-deploy units drilling dry gas shale wells to liquids rich basins. Previous evidence showed Chesapeake rigs leaving both the Barnett and the Haynesville for the Eagle Ford shale.

Then came last Friday’s data, and the number of Chesapeake rigs classified as turning to the right took a 28-rig drop from 133 to 105. By commodity, Chesapeake saw the number of rigs classified as drilling natural wells fall from 70 to 35 units.

Further review of the data shows two trends under way. The first is clerical. Chesapeake’s Granite Wash rigs were reclassified as oil-directed. The aftermath shoed a 15-unit decline in Chesapeake’s horizontal gas drilling in the Granite Wash, which fell from 16 rigs classified as horizontal gas to just one last week, while Chesapeake’s oil-directed horizontal rig count in the Granite Wash jumped from one rig to 18.

The second trend is found in rig float. Rig float refers to rigs that are either rigging down, rigging up or moving between wells. Hart tallied 72 units rigging up as of Friday, Jan. 27. Of those, Chesapeake accounted for 20. Notably, 13 of those units are in Oklahoma counties prospective for the Mississippi Lime, including nine rigs in Woods County, Okla., and three more in neighboring Alfalfa County.

The takeaway is that industry metrics are reflecting changed budget priorities as 2012 gets under way. Those budgets are liquids oriented and a portion of those budgets will underwrite expanded activity in the Midcontinent.

In Chesapeake’s case, those priorities are already registering as a wind-down in dry gas drilling and are about to register as a wind-up in liquids rich efforts in the Mississippi Lime.

Toss in SandRidge’s coming Mississippi Lime mobilization and Apache’s expanded Anadarko Basin efforts and the Midcontinent is on its way to higher rig count in 2012.

Oil Accounted For 59% of 2011 Completions

The American Petroleum Institute released figures last week on fourth quarter well completions. A review of API statistics during the last two years show 2011 oil completions rose 26% to 24,841 wells over 2010 while footage drilled grew 6% to 310.53 million feet. Oil wells represented 59% of 2011 completions compared to 48% in 2010.