In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI - Analyst Report) reported a dip in the U.S. rig count (number of rigs searching for oil and gas in the country). This can be primarily attributed to a decrease in the tally of land rigs.
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 1,968 for the week ended September 2, 2011. This is down by 7 from the previous week’s rig count and represents the first decline in 5 weeks.
Despite this, 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 1,653. 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 descended by 8 to 1,917, inland waters activity increased by 1 to 18, while offshore drilling remained steady at 33 rigs.
Natural Gas Rig Count
The natural gas rig count decreased for the second time in as many weeks to 895 (a drop of 3 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 this year but recovered to touch 900 last month – is down approximately 10% 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 has rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. In the year-ago period, there were 977 active natural gas rigs.
Oil Rig Count
The oil rig count was down by 5 to 1,064, the first decline since April 15. Despite this week-over-week fall, the current tally is considerably higher than the previous year’s rig count of 665. 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 9 was up by 1 from the previous week.
Rig Count by Type
The number of vertical drilling rigs fell by 13 to 594, 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 6 at 1,374. In particular, horizontal rig units came off by 4 from last week’s all-time high of 1,140.