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Baker Hughes Inc. recently declared the rig count for the week ended Feb 3, 2017. In the U.S., the total number of rigs increased from the previous week owing to a higher number of land rigs. This represents the third consecutive increase in the U.S. weekly rig count and shows the consistency in growing count after the U.S. witnessed a fall in rig numbers during the week ended Jan 13.
North America Rig Count
Total rig count in North America – the U.S. and Canada – for the week of Feb 3, 2017 was 1072. The reported figure was higher than 1057 a week ago and the year-earlier figure of 813.
U.S. rig: Total number of rigs in the U.S. was 729. This was higher than 712 rigs for week ended Jan 27, and 571 during the year-ago period.
Of the total U.S. rigs, land rigs were 705. This is higher than the 689 rigs in the previous week and 543 rigs in year-ago week.
The number of U.S. offshore rigs for week ended Feb 3, 2017 was 22, up from 21 rigs in the previous week but down from 26 in the week ended Feb 5, 2016.
Canada rig: In Canada, the total rig count was 343, lower than 345 rigs in last week but higher than 242 counted in year-ago week.
What Drove the Improvement?
The North American rig count depicts that the U.S. is the strongest growth driver for the number of rigs in the continent. Oklahoma, where rig count rose by six, was the prime contributor to growth in the U.S. weekly rig count. Moreover, New Mexico added four rigs in the U.S.
Let’s analyze the broader factor for the increase in rig count in the U.S. Since OPEC and non-OPEC countries agreed to curb crude output amid the supply glut, oil prices started to improve again. In fact, many media releases show that the production cut has started to bear fruit.
Given these developments, U.S. shale producers have been gathering to oil patches as they will be able to sell the commodity at higher prices. In other words, U.S. exploration and production (E&P) companies are expected to produce more and hence, could gain market share at the expense of OPEC amid increasing oil prices.
Who will Benefit?
U.S. E&P firms will likely benefit the most from these developments. Our proprietary model shows that Denbury Resources Inc. , Abraxas Petroleum Corp. (AXAS - Free Report) , Halcón Resources Corp. and Approach Resources, Inc. are among the upstream companies that are worth including in your portfolio. Denbury Resources sports a Zacks Rank #1 (Strong Buy), while Abraxas Petroleum, Sundance Energy and Approach Resources each carries a Zacks Rank #2 (Buy).
All the stocks show strong pricing figure and were able to surpass the Zacks categorized Oil & Gas-U.S Exploration & Production industry over the last three months. While the broader industry gained 9.5% during the aforesaid period, shares of Denbury, Abraxas Petroleum, Halcón Resources and Approach Resources gained 34.6%, 55%, 11.4% and 30%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Ideas with Even Greater Upside?
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U.S. Rig Count Continues to Increase
Baker Hughes Inc. recently declared the rig count for the week ended Feb 3, 2017. In the U.S., the total number of rigs increased from the previous week owing to a higher number of land rigs. This represents the third consecutive increase in the U.S. weekly rig count and shows the consistency in growing count after the U.S. witnessed a fall in rig numbers during the week ended Jan 13.
North America Rig Count
Total rig count in North America – the U.S. and Canada – for the week of Feb 3, 2017 was 1072. The reported figure was higher than 1057 a week ago and the year-earlier figure of 813.
U.S. rig: Total number of rigs in the U.S. was 729. This was higher than 712 rigs for week ended Jan 27, and 571 during the year-ago period.
Of the total U.S. rigs, land rigs were 705. This is higher than the 689 rigs in the previous week and 543 rigs in year-ago week.
The number of U.S. offshore rigs for week ended Feb 3, 2017 was 22, up from 21 rigs in the previous week but down from 26 in the week ended Feb 5, 2016.
Canada rig: In Canada, the total rig count was 343, lower than 345 rigs in last week but higher than 242 counted in year-ago week.
What Drove the Improvement?
The North American rig count depicts that the U.S. is the strongest growth driver for the number of rigs in the continent. Oklahoma, where rig count rose by six, was the prime contributor to growth in the U.S. weekly rig count. Moreover, New Mexico added four rigs in the U.S.
Let’s analyze the broader factor for the increase in rig count in the U.S. Since OPEC and non-OPEC countries agreed to curb crude output amid the supply glut, oil prices started to improve again. In fact, many media releases show that the production cut has started to bear fruit.
Given these developments, U.S. shale producers have been gathering to oil patches as they will be able to sell the commodity at higher prices. In other words, U.S. exploration and production (E&P) companies are expected to produce more and hence, could gain market share at the expense of OPEC amid increasing oil prices.
Who will Benefit?
U.S. E&P firms will likely benefit the most from these developments. Our proprietary model shows that Denbury Resources Inc. , Abraxas Petroleum Corp. (AXAS - Free Report) , Halcón Resources Corp. and Approach Resources, Inc. are among the upstream companies that are worth including in your portfolio. Denbury Resources sports a Zacks Rank #1 (Strong Buy), while Abraxas Petroleum, Sundance Energy and Approach Resources each carries a Zacks Rank #2 (Buy).
All the stocks show strong pricing figure and were able to surpass the Zacks categorized Oil & Gas-U.S Exploration & Production industry over the last three months. While the broader industry gained 9.5% during the aforesaid period, shares of Denbury, Abraxas Petroleum, Halcón Resources and Approach Resources gained 34.6%, 55%, 11.4% and 30%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>