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 inland water rig count.

The Baker Hughes rig counts, issued since 1944, act as an important yardstick for drilling contractors like 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 exploration and production in the U.S. totaled 1,685 for the week ended November 12, 2010. This is up by 2 rigs from the previous week’s rig count and represents the highest level achieved this year. The current nation-wide rig count is 92% higher than the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeding the prior-year level of 1,101. 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 inland waters climbed by 2 rigs to 20, while land operations and offshore activity remained steady at 1,642 and 23, respectively.

Natural Gas Rig Count

The natural gas rig count, which has fallen three times in the last five weeks, remained unchanged from the previous week at 955. The current number of gas-directed rigs is just 37 short of an 18-month high reached during mid-August rebounding strongly after bottoming out to a 7-year low of 665 on July 17, 2009. Still, the rig count remains 41% below its peak of 1,606 in late summer 2008. In the year-ago period, there were 728 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 2 rigs to 720, the 14th gain in the last 17 weeks. The current tally is considerably higher than the previous year’s rig count of 361. It has recovered nicely from a low of 179 in June 2009, more than quadrupling in number.

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 was up 14 to 536, 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) fell by 12 to 1,149.

 
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