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Permian Basin Witnesses Removal of 4 Oil Drilling Rigs
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In its weekly release, Baker Hughes, a GE company reported a decline in the U.S. rig count.
More on the Rig Count
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.
A change in the Houston-based oilfield services players’ rotary rig count impacts demand for energy services like drilling, completion and production provided by the likes of Halliburton Company (HAL), Schlumberger Limited (SLB - Free Report) , Diamond Offshore Drilling, Inc. (DO - Free Report) and Transocean Ltd. (RIG - Free Report) .
Details
Total U.S. Rig Count Decreases: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 1075 in the week ended Dec 7, lower than 1076 in the prior week. This marks a fall in rig count for three consecutive weeks.
Despite the rig count slipping to an all-time low of 404 in May 2016, it has been rising rapidly in U.S. shale resources. The current national rig count is higher than the prior-year level of 931.
For the week under review, the fall in rig count can be attributed to decreased onshore operations. The number of onshore rigs totaled 1050, down from 1051 in the previous week. The tally for offshore and inland water rigs, however, was in line with the counts for the week ended Nov 30. Through the week ended Dec 7, two rigs operated in the inland waters, while the count for offshore rigs was 23.
U.S. Removes 10 Oil Rigs: Oil rig tally was 877, down from 887 in the week ended Nov 30. The fall in weekly count for crude has been the highest since May 2016.
However, the current total, though far from the peak of 1,609 attained in October 2014, is significantly higher than last year’s 751.
Natural Gas Rig Count Increases in the United States: The natural gas rig count of 198 rose from the tally of 189 for the week ended Nov 30.
Moreover, like oil, the count of rigs exploring the commodity is above the prior-year number of 180. Notably, per the recent report, the number of natural gas-directed rigs is almost 88%, below the all-time high of 1,606 in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 70 units, down from the previous week’s 74. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations also known as shale formations) increased by three units to 1,005.
Gulf of Mexico (GoM) Rig Count Flat: The GoM rig count is 23 units, of which 18 were oil directed. The count was in line with the tally for the week ended Nov 30.
Conclusion
The Permian basin saw the removal of four oil rigs, primarily dragging the weekly oil count down.
Investors should know that low oil, trading below $55 per barrel, is not a slippery affair for U.S. shale producers. With the advancement of technologies, well costs have declined drastically. Also, upstream energy players, with operations in key domestic shale plays, have hedged part of their 2018 and 2019 liquid volumes — claimed energy research and consulting group Wood Mackenzie. These developments will likely insulate some of the key shale players — like Concho Resources Inc. and Whiting Petroleum Corporation — against the weak crude landscape. Both the shale players carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Permian Basin Witnesses Removal of 4 Oil Drilling Rigs
In its weekly release, Baker Hughes, a GE company reported a decline in the U.S. rig count.
More on the Rig Count
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.
A change in the Houston-based oilfield services players’ rotary rig count impacts demand for energy services like drilling, completion and production provided by the likes of Halliburton Company (HAL), Schlumberger Limited (SLB - Free Report) , Diamond Offshore Drilling, Inc. (DO - Free Report) and Transocean Ltd. (RIG - Free Report) .
Details
Total U.S. Rig Count Decreases: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 1075 in the week ended Dec 7, lower than 1076 in the prior week. This marks a fall in rig count for three consecutive weeks.
Despite the rig count slipping to an all-time low of 404 in May 2016, it has been rising rapidly in U.S. shale resources. The current national rig count is higher than the prior-year level of 931.
For the week under review, the fall in rig count can be attributed to decreased onshore operations. The number of onshore rigs totaled 1050, down from 1051 in the previous week. The tally for offshore and inland water rigs, however, was in line with the counts for the week ended Nov 30. Through the week ended Dec 7, two rigs operated in the inland waters, while the count for offshore rigs was 23.
U.S. Removes 10 Oil Rigs: Oil rig tally was 877, down from 887 in the week ended Nov 30. The fall in weekly count for crude has been the highest since May 2016.
However, the current total, though far from the peak of 1,609 attained in October 2014, is significantly higher than last year’s 751.
Natural Gas Rig Count Increases in the United States: The natural gas rig count of 198 rose from the tally of 189 for the week ended Nov 30.
Moreover, like oil, the count of rigs exploring the commodity is above the prior-year number of 180. Notably, per the recent report, the number of natural gas-directed rigs is almost 88%, below the all-time high of 1,606 in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 70 units, down from the previous week’s 74. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations also known as shale formations) increased by three units to 1,005.
Gulf of Mexico (GoM) Rig Count Flat: The GoM rig count is 23 units, of which 18 were oil directed. The count was in line with the tally for the week ended Nov 30.
Conclusion
The Permian basin saw the removal of four oil rigs, primarily dragging the weekly oil count down.
Investors should know that low oil, trading below $55 per barrel, is not a slippery affair for U.S. shale producers. With the advancement of technologies, well costs have declined drastically. Also, upstream energy players, with operations in key domestic shale plays, have hedged part of their 2018 and 2019 liquid volumes — claimed energy research and consulting group Wood Mackenzie. These developments will likely insulate some of the key shale players — like Concho Resources Inc. and Whiting Petroleum Corporation — against the weak crude landscape. Both the shale players carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>