BHI: 1847 Domestic Rigs at Work - Analyst Blog
May 31 2011 - 9:39AM
Zacks
In its weekly release, Houston-based oilfield services company
Baker Hughes Inc. (BHI) reported a rise in the
U.S. rig count (number of rigs searching for oil and gas in the
country), primarily reflecting an increase in the tally of land
rigs.
In particular, there were more rigs drilling for oil than gas
for the sixth week in a row as the companies look to capitalize on
soaring oil prices, which are currently trending at around $100 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
1,847 for the week ended May 27, 2011. This is up by 17 from the
previous week’s rig count and represents the first increase in 3
weeks.
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 1,535. 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 15 to 1,796, while
offshore drilling increased by 4 to 35. However, inland waters
activity was down by 2 at 16 rigs.
Natural Gas Rig Count
The natural gas rig count, which slid to a 16-month low last
week, increased for the first time in 3 weeks to 881 (a gain of 15
rigs from the previous week). Despite the weekly improvement, the
number of gas-directed rigs is down more than 11% from its 2010
peak of 992, reached during mid-August.
The current natural gas rig count remains 45% below its all-time
high of 1,606 reached back in late summer 2008, but have rebounded
strongly after bottoming out to a 7-year low of 665 on July 17,
2009. In the year-ago period, there were 967 active natural gas
rigs.
Oil Rig Count
The oil rig count was up by 4 to 958. The current tally – the
maximum in 23 years – is considerably higher than the previous
year’s rig count of 555. 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 8, was down by 2 from the previous week.
Rig Count by Type
The number of vertical drilling rigs fell by 6 to 561, 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 up by 23 at
1,286. In particular, horizontal rig units rose by 16 in the latest
week to hit a new all-time high of 1,054.
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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