Baker Hughes, a GE company BHGE, recently announced the rig count for March. In the United States, the total rig number fell from the February 2019 figure due to a drop in count of onshore rigs. This was the third consecutive decline in the U.S. monthly rig count.
More on Rig Count
Baker Hughes’ data, issued at the end of every week since 1944, help 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 affects demand for energy services like drilling, completion and production provided by companies like Halliburton Company HAL, Schlumberger Limited SLB, Diamond Offshore Drilling, Inc and Transocean Ltd. RIG.
Analysis of the Data
North America Rig Count
In March 2019, rig count in North America (the United States and Canada) totaled 1,174. The figure was lower than 1,279 in February 2019 and 1,207 a year ago.
U.S. rig: Total number of rigs in the United States was 1,023. The figure is lower than 1,049 rigs last February but higher than 989 a year ago.
Of the total count, land rigs were 1,001. This is lower than 1,029 rigs in the prior month but higher than 976 rigs last March.
The number of U.S. offshore rigs in March 2019 was 22, up from 20 in February 2019 and 13 in March 2018.
Canada rig: In Canada, the total rig count of 151 was lower than 230 in February 2019 and 218 in March 2018.
International Rig Count
Total international rig count (offshore and land) in the month of March was 1,039. The tally increased by 12 from February 2019. Moreover, the figure was higher than 972 recorded in March 2018.
Offshore rig: The offshore rig count in March 2019 was 247, lower than 250 in February 2019 but higher than 185 in the prior-year period.
Land Rig: The land rig count was 792 compared with 777 in February 2019 and 787 in March 2018.
Most explorers and producers in the United States have opted for conservative spending since they are mostly bothered about bottom-line growth — being forced by investors following years of dull returns — rather than just surge in oil and gas production. Overall, curtailing investments in domestic upstream activities might affect rig demand. Hence, U.S. drillers may continue to lower oil rig count in the coming months.
Despite the pessimism, there are a couple of upstream energy players like Concho Resources Inc CXO and Apache Corporation APA that investors should keep an eye on. Both the stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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