In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI - Analyst Report) reported a marginal rise in the U.S. rig count (number of rigs searching for oil and gas in the country). This can be primarily attributed to an increase in the tally of land rigs searching for oil.
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), 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.
Rigs engaged in exploration and production in the U.S. totaled 1,975 for the week ended August 26, 2011. This is up by 1 from the previous week’s rig count and represents the highest level since November 7, 2008.
The current nationwide rig count is more than double that of the 6-year low of 876 (in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,656. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.
Rigs engaged in land operations climbed by 4 to 1,925, offshore drilling decreased by 1 to 33, while inland waters activity was down by 2 at 17 rigs.
Natural Gas Rig Count
The natural gas rig count decreased for the first time in 4 weeks to 898 (a drop of 2 rigs from the previous week). As per the most recent report, the number of gas-directed rigs – which slid to a 16-month low of 866 in May but recovered to touch 900 last week – is down approximately 9.5% from its 2010 peak of 992, reached during mid-August.
The current natural gas rig count remains 44% below its all-time high of 1,606 reached in late summer 2008, but have rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. In the year-ago period, there were 973 active natural gas rigs.
Oil Rig Count
The oil rig count was up by 3 to 1,069. The current tally – the highest in 23 years – is considerably more than the previous year’s rig count of 672. It has recovered strongly from a low of 179 in June 2009, rising almost 6 times.
Miscellaneous Rig Count
The miscellaneous rig count (primarily drilling for geothermal energy) at 8 remained steady compared to the previous week.
Rig Count by Type
The number of vertical drilling rigs fell by 2 to 607, 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 3 at 1,368. In particular, horizontal rig units rose by 2 in the latest week to hit a new all-time high of 1,140.