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.

 
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