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US Rig Count Down by Two, Less Drilling Activity on Land
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In its weekly release, Houston-based oilfield services company Baker Hughes Inc. reported a lower U.S. rig count (number of rigs searching for oil and gas in the country) than the previous week. The West Texas Intermediate (WTI) oil futures are currently trading at around $47 per barrel.
Analysis of the Weekly Rig Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 489 in the week ended Aug 26, 2016. This was down by two from the week before.
The current nationwide rig count is now more than half the prior-year level of 877. Notably, the count had peaked at 4,530 in 1981. Inversely, an all-time low was recorded in March. Since then, the rig count has seen improved somewhat.
Rigs engaged in land operations were 468 compared with 470 in the previous week. Inland water activity involved four rigs, up by one with the prior week. Offshore drilling was down by one to 17 units.
Natural Gas Rig Count: The count fell by two from last week to 81. However, the current natural gas rig count is almost 95% below the high of 1,606 reached in late summer 2008. In the year-ago period, there were 202 active natural gas rigs.
Oil Rig Count: The count was flat with the previous week at 406. The number had skyrocketed to 1,609 in Oct 2014 – the highest figure to have been reported since Baker Hughes started breaking up oil and natural gas rig counts in 1987. The current tally is well below the previous year’s rig count of 675.
Rig Count by Type: The number of vertical drilling rigs fell by two to 62, while the horizontal/directional rig count (encompassing new drilling technology that can drill and extract gas from dense rock formations, also known as shale formations) was flat at 427.
Gulf of Mexico (GoM): The GoM rig count was down by one to 17 units.
Conclusion
Key Barometer of Drilling Activity: The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.
An increase or decrease in the Baker Hughes’ rotary rig count weighs heavily on demand for energy services like drilling, completion and production provided by companies that include large-cap firms such as Halliburton Co. (HAL - Free Report) , Schlumberger Ltd. (SLB - Free Report) and Weatherford International plc .
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US Rig Count Down by Two, Less Drilling Activity on Land
In its weekly release, Houston-based oilfield services company Baker Hughes Inc. reported a lower U.S. rig count (number of rigs searching for oil and gas in the country) than the previous week. The West Texas Intermediate (WTI) oil futures are currently trading at around $47 per barrel.
Analysis of the Weekly Rig Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 489 in the week ended Aug 26, 2016. This was down by two from the week before.
The current nationwide rig count is now more than half the prior-year level of 877. Notably, the count had peaked at 4,530 in 1981. Inversely, an all-time low was recorded in March. Since then, the rig count has seen improved somewhat.
Rigs engaged in land operations were 468 compared with 470 in the previous week. Inland water activity involved four rigs, up by one with the prior week. Offshore drilling was down by one to 17 units.
Natural Gas Rig Count: The count fell by two from last week to 81. However, the current natural gas rig count is almost 95% below the high of 1,606 reached in late summer 2008. In the year-ago period, there were 202 active natural gas rigs.
Oil Rig Count: The count was flat with the previous week at 406. The number had skyrocketed to 1,609 in Oct 2014 – the highest figure to have been reported since Baker Hughes started breaking up oil and natural gas rig counts in 1987. The current tally is well below the previous year’s rig count of 675.
Rig Count by Type: The number of vertical drilling rigs fell by two to 62, while the horizontal/directional rig count (encompassing new drilling technology that can drill and extract gas from dense rock formations, also known as shale formations) was flat at 427.
Gulf of Mexico (GoM): The GoM rig count was down by one to 17 units.
Conclusion
Key Barometer of Drilling Activity: The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.
An increase or decrease in the Baker Hughes’ rotary rig count weighs heavily on demand for energy services like drilling, completion and production provided by companies that include large-cap firms such as Halliburton Co. (HAL - Free Report) , Schlumberger Ltd. (SLB - Free Report) and Weatherford International plc .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>