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 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 1,700, up by 6 from the previous week's count. The current nation-wide 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 1,220. 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 5 to 1,661, offshore drilling increased by 1 to 25, while inland waters activity remained steady at 14.

Natural Gas Rig Count

The natural gas rig count decreased for the fifth successive week to 914 (a loss of 5 rigs from the previous week). As a result of the weekly decline, the number of gas-directed rigs are down almost 8% from the 18-month high reached during mid-August, when it hit 992, the highest level since February 2009. The current natural gas rig count – a 10-month low – remains 43% 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 781 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 12 to 777, the nineteenth gain in the last 25 weeks. The current tally is considerably higher than the previous year's rig count of 427. It has recovered strongly 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 9, was down by 1 from the previous week.

Rig Count by Type

The number of vertical drilling rigs was up down 12 to 523, 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 18 to 1,177.