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 attributed to a decrease in the tally of both oil and natural gas-directed 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 ) , Helmerich & Payne ( HP - Analyst Report ) , etc. in gauging the overall business environment of the oil and gas industry.

Analysis of the Data

Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,864 for the week ended September 7, 2012. This was down by 30 from the previous week’s count and represents the fourth decrease in as many weeks.

Despite this, the current nationwide rig count is more than double than that of the 6-year low of 876 (in the week ended June 12, 2009) though it is below the prior-year level of 1,958. 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 31 to 1,794, inland waters activity was up by 1 to 19 rigs, while offshore drilling remained steady at 51 units.

Natural Gas Rig Count: The natural gas rig count decreased for the seventeenth time in 20 weeks to 452 (a drop of 21 rigs from the previous week). As per the most recent report, the number of gas-directed rigs is at their lowest level since July 9, 1999 and is down 52% from its 2011 peak of 936, reached during mid-October.

The current natural gas rig count remains 72% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 892 active natural gas rigs.

Oil Rig Count: The oil rig count – which was at a 25-year high of 1,432 in August – was down by 10 to 1,409. Nevertheless, the current tally is way above the previous year’s rig count of 1,057. It has recovered strongly from a low of 179 in June 2009, rising by almost 8 times.

Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 3 was up by 1 from the previous week.

Rig Count by Type: The number of vertical drilling rigs fell by 11 to 515, 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 down by 19 at 1,349. In particular, horizontal rig units – that reached an all-time high of 1,193 in May this year – decreased by 14 from the last week’s level to 1,135.