U.S. Rig Count Edges Lower - Analyst Blog
November 29 2011 - 8:45AM
Zacks
In its weekly release,
Houston-based oilfield services company Baker Hughes Inc.
(BHI) reported a marginal dip in the U.S.
rig count (number of rigs searching for oil and gas in the
country). This can be primarily attributed to a decrease in the
tally of land rigs, partially offset by improved offshore rig
count.
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), 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 2,000 for the week ended November
25, 2011. This was down by 1 from the previous week’s rig count and
represents the third successive decline.
Despite this, the current
nationwide rig count is more than double that of the 6-year low of
876 (in the week ended June 12, 2009) and significantly exceeds the
prior-year level of 1,687. 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
descended by 4 to 1,941, while offshore drilling was up by 3 to 39
rigs. Inland waters activity remained steady at 20 units.
Natural Gas Rig
Count
The natural gas rig count decreased
for the fourth week in a row to 865 (a drop of 6 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 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 953
active natural gas rigs.
Oil Rig
Count
The oil rig count, which hit a
24-year high of 1,133 earlier this month, was up by 5 to 1,130. The
current tally is way above the previous year’s rig count of 724. It
has recovered strongly from a low of 179 in June 2009, rising more
than 6 times.
Miscellaneous Rig
Count
The miscellaneous rig count
(primarily drilling for geothermal energy) at 5 remained unchanged
from the previous week.
Rig Count by
Type
The number of vertical drilling
rigs fell by 9 to 632, 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 8 at 1,368. In particular, horizontal rig
units – that reached an all-time high of 1,157 in early November
this year – rose by 8 from last week’s level to 1,155.
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
PATTERSON-UTI (PTEN): Free Stock Analysis Report
TRANSOCEAN LTD (RIG): Free Stock Analysis Report
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