HP Helmerich and Payne Inc

In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI) reported an unchanged U.S. rig count (number of rigs searching for oil and gas in the country), as an increase in the number of oil rigs was offset by a fall in the natural gas rig count.

Interestingly,  there were more rigs drilling for oil than gas for the fifth week in a row. This has happened for the first time since 1995 with companies looking to capitalize on soaring oil prices, which are currently trending at around $98 a barrel.

The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. (RIG), Diamond Offshore (DO), Noble Corp. (NE), Pride International (PDE ) , Nabors Industries (NBR), Patterson-UTI Energy (PTEN) and Helmerich & Payne (HP) in gauging the overall business environment of the oil and gas industry.

Weekly Summary

Rigs engaged in exploration and production in the U.S. totaled 1,830 for the week ended May 20, 2011, same as the previous week’s count.

The current nationwide rig count is more than double that of the 6-year low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,518. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.

Rigs engaged in land operations climbed by 1 to 1,781, while inland waters activity increased by 1 to 18. However, offshore drilling was down by 2 tat 31 rigs. 

Natural Gas Rig Count

The natural gas rig count decreased for the second consecutive week to 866 (a drop of 8 rigs from the previous week). As per the most recent report, the number of gas-directed rigs is at their lowest level since January 29, 2010 and is down nearly 13% from its 2010 peak of 992, reached during mid-August.

The current natural gas rig count remains 46% below its all-time high of 1,606 reached back in late summer 2008, but has rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. In the year-ago period, there were 969 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 7 to 954. The current tally – the maximum in 23 years – is considerably higher than the previous year’s rig count of 538. It has recovered strongly from a low of 179 in June 2009, rising more than 5 times.

Miscellaneous Rig Count

The miscellaneous rig count (primarily drilling for geothermal energy), at 10, was up by 1 from the previous week.

Rig Count by Type

The number of vertical drilling rigs rose by 4 to 567, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was down by 4 to 1,263. In particular, horizontal rig units came off by 3 units from last week’s all-time high of 1,041.

 
BAKER-HUGHES (BHI): Free Stock Analysis Report
 
DIAMOND OFFSHOR (DO): Free Stock Analysis Report
 
HELMERICH&PAYNE (HP): Free Stock Analysis Report
 
NABORS IND (NBR): Free Stock Analysis Report
 
NOBLE CORP (NE): Free Stock Analysis Report
 
PRIDE INTL INC (PDE): Free Stock Analysis Report
 
PATTERSON-UTI (PTEN): Free Stock Analysis Report
 
TRANSOCEAN LTD (RIG): Free Stock Analysis Report
 
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