U.S. Rig Count Touches 1,800

In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI - Analyst Report) 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 tally of land rigs.

In particular, there were more rigs drilling for oil than gas – the first time this has happened since 1995 – as companies look to capitalize on soaring oil prices. Crude prices continue to march higher and are currently trending at around $111 a barrel. This can be mainly attributable to concerns that the unrest in Libya will boil over to other oil rich nations in the Middle East and lead to a supply shortfall.

The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. (RIG - Analyst Report), Diamond Offshore (DO - Analyst Report), Noble Corp. (NE - Analyst Report), Pride International (PDE), Nabors Industries (NBR - Analyst Report), Patterson-UTI Energy (PTEN - Analyst Report) and Helmerich & Payne (HP - Analyst Report) 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 1,800 for the week ended April 21, 2011. This is up by 28 from the previous week’s rig count and represents the highest level since December 5, 2008.

The current nationwide rig count is more than double that of the 6-year low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,482. 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 27 to 1,754, while offshore drilling increased by 2 to 28. However, inland waters activity descended by 1 to 18 rigs.

Natural Gas Rig Count

The natural gas rig count decreased for the third time in as many weeks to 878 (a drop of 7 rigs from the previous week). As per the most recent report, the number of gas-directed rigs are down more than 11% from the 18-month high reached during mid-August, 2010, when it hit 992, the highest since February 2009.

The current natural gas rig count remains 45% 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 956 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 33 to 913. The current tally – the highest in 23 years – is considerably more than the previous year’s rig count of 514. It has recovered strongly from a low of 179 in June 2009, rising more than 5 times.

Miscellaneous Rig Count

The miscellaneous rig count (primarily drilling for geothermal energy), at 9, was up by 2 from the previous week.

Rig Count by Type

The number of vertical drilling rigs rose by 15 to 567, 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) was up by 13 to 1,233.

Read the full analyst report on BHI

Read the full analyst report on PTEN

Read the full analyst report on PDE

Read the full analyst report on NE

Read the full analyst report on RIG

Read the full analyst report on HP

Read the full analyst report on NBR

Read the full analyst report on DO