U.S. Rig Count Snaps 12 Week Gain - Analyst Blog

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), reflecting a decrease in the land rig count.

 

Rigs exploring and producing in the U.S. totaled 1,653 for the week ended September 3, 2010. This is down by 3 from the previous week’s rig count and represents the first decline in 13 weeks. Despite this, the current nation-wide rig count is 89% higher from the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,009. 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 fell by 3 to 1,619, while inland waters and offshore activity remained steady at 14 and 20, respectively.

 

 

The natural gas rig count increased for the first time in 3 weeks to 977 (a gain of 4 from the previous week). In August, the number of gas-directed rigs hit 992, an 18-month high. The U.S. gas drilling rig count has rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. Still, the rig count remains 39% lower than its peak of 1,606 in late summer 2008. In the year-ago period, there were 701 active natural gas rigs.

 

 

The oil rig count was down by 7 to 665, the first decline in 7 weeks. Despite the week-over-week fall, the current tally is considerably higher than the previous year’s rig count of 295. It has recovered nicely from a low of 179 in June 2009, nearly quadrupling in number.

 

 

The miscellaneous rig count (primarily drilling for geothermal energy) at

11 remained unchanged from the previous week.

 

 

The number of vertical drilling rigs was up one to 528. On the other hand, 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 4 to 1,125.