U.S. Rig Count Edges Higher - Analyst Blog
June 13 2011 - 8:41AM
Zacks
In its weekly release, Houston-based oilfield services company
Baker Hughes Inc. (BHI) reported a marginal rise
in the U.S. rig count (number of rigs searching for oil and gas in
the country). This can be primarily attributed to an increase in
the tally of oil rigs, almost offset by a fall in the natural gas
and miscellaneous rig counts.
In particular, there were more rigs drilling for oil than gas
for the eighth week in a row as the companies look to capitalizing
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
1,855 for the week ended June 10, 2011. This is up by 1 from the
previous week’s rig count and represents the highest level since
November 26, 2008.
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 1,527. 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 1 to 1,805, inland
waters activity increased by 2 to 17, while offshore drilling
remained steady at 33 rigs.
Natural Gas Rig Count
The natural gas rig count decreased for the first time in 3
weeks to 879 (a drop of 8 rigs from the previous week). As per the
most recent report, the number of gas-directed rigs – which slid to
a 16-month low of 866 last month – 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 954 active natural gas
rigs.
Oil Rig Count
The oil rig count was up by 10 to 969. The current tally – the
maximum in 23 years – is considerably higher than the previous
year’s rig count of 561. 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 7, was down by 1 from the previous week.
Rig Count by Type
The number of vertical drilling rigs fell by 14 to 559, 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 15 at
1,296. In particular, horizontal rig units rose by 14 in the latest
week to hit a new all-time high of 1,065.
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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