In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI) reported a fall in the U.S. rig count (number of rigs searching for oil and gas in the country), primarily reflecting a decrease in the number of land rigs.
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 1,699 for the week ended February 25, 2011. This is down by 14 from the previous week’s rig count and represents the third decline in as many weeks.
Despite this, the current nationwide rig count is 94% higher than the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,373. It rose to a 22-year high in 2008, peaking to 2,031 in the weeks ending August 29 and September 12.
Rigs engaged in land operations descended by 14 rigs to 1,658, while offshore drilling and inland waters activity remained steady at 25 and 16, respectively.
Natural Gas Rig Count
The natural gas rig count increased for the first time in four weeks to 906 (a gain of 1 rig from the previous week). Despite the modest weekly improvement, the number of gas-directed rigs are down approximately 9% from the 18-month high reached during mid-August, 2010, when it hit 992, the highest since February 2009.
The current natural gas rig count remains 44% below its peak of 1,606 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 905 active natural gas rigs.
Oil Rig Count
The oil rig count was down by 15 to 783, the third decline in 8 weeks. Despite this week-over-week fall, the current tally is considerably more than the previous year’s rig count of 456. It has recovered strongly from a low of 179 in June 2009, rising almost 4.5 times.
Miscellaneous Rig Count
The miscellaneous rig count (primarily drilling for geothermal energy) at 10 remained unchanged from the previous week.
Rig Count by Type
The number of vertical drilling rigs fell by 8 to 498, 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 6 to 1,201.
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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