U.S. Rig Count Increases by 10 - Analyst Blog

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 land rig count.

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 1,723, up by 10 from the previous week's rig count and represents the highest level since December 2008. The current nation-wide rig count is 97% higher than the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,161. 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 climbed by 10 to 1,683, while inland waters and offshore activity remained steady at 17 and 23, respectively.

Natural Gas Rig Count

The natural gas rig count decreased for the fifth time in nine weeks to 948 rigs (a loss of 13 from the previous week). Despite the weekly decline, the number of gas-directed rigs are just 44 short of the 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 757 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 21 rigs to 763, the seventeenth gain in the last 21 weeks. The current tally is considerably higher than the previous year's rig count of 393. 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 12, was up by 2 from the previous week.

Rig Count by Type

The number of vertical drilling rigs was up by 3 to 532, 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) rose by 7 to 1,191.

 
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