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 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), 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 1,887 for the week ended July 8, 2011. This is up by 1 from the previous week’s rig count and represents the highest level since November 21, 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 1,567. 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 1 to 1,838, while inland waters activity and offshore drilling remained steady at 16 and 33, respectively.
Natural Gas Rig Count
The natural gas rig count decreased for the first time in 3 weeks to 873 (a drop of 1 rig 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 in May – is down approximately 12% 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 964 active natural gas rigs.
Oil Rig Count
The oil rig count was up by 1 to 1,007. The current tally – the highest in 23 years – is considerably more than the previous year’s rig count of 592. It has recovered strongly from a low of 179 in June 2009, rising more than 5.5 times.
Miscellaneous Rig Count
The miscellaneous rig count (primarily drilling for geothermal energy), at 7, was up by 1 from the previous week.
Rig Count by Type
The number of vertical drilling rigs remained flat at 570, 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 1 at 1,317.
