In its weekly release, Houston-based oilfield services company
Baker Hughes Inc.
) reported a rise in the U.S. rig count (number of rigs searching
for oil and gas in the country). This can be attributed to an
increase in the tally of natural gas-directed rigs, partially
offset by cutbacks in oil rig count.
The Baker Hughes rig count, issued since 1944, acts as an
important yardstick for drilling contractors such as
Helmerich & Payne
), etc. in gauging the overall business environment of the oil and
Analysis of the Data
Rigs engaged in exploration and production in the U.S. totaled
1,965 for the week ended July 06, 2012. This was up by 6 from the
previous week's count and represents the first increase in the past
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 comfortably
exceeds the prior-year level of 1,887. It rose to a 22-year high in
2008, peaking at 2,031 in the weeks ending August 29 and September
Rigs engaged in land operations climbed by 3 to 1,896, offshore
drilling was up by 2 to 50 rigs, while inland waters activity
gained a rig to reach 19 units.
Natural Gas Rig Count:
The natural gas rig count - which recently slumped to a 13-year low
- increased for just the fourth time in 26 weeks to 542 (a gain of
8 rigs from the previous week). Despite the weekly improvement, the
number of gas-directed rigs is down approximately 42% from its 2011
peak of 936, reached during mid-October.
In fact, the current natural gas rig count remains 66% below its
all-time high of 1,606 reached in late summer 2008. In the year-ago
period, there were 873 active natural gas rigs.
Oil Rig Count:
The oil rig count - which was at a 25-year high of 1,421 in the
previous week - was down by 2 to 1,419. Nevertheless, the current
tally is way above the previous year's rig count of 1,007. It has
recovered strongly from a low of 179 in June 2009, rising by nearly
Miscellaneous Rig Count:
The miscellaneous rig count (primarily drilling for geothermal
energy) at 4 remained unchanged from the previous week.
Rig Count by Type:
The number of vertical drilling rigs fell by 4 to 549, 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 10 at
1,416. In particular, horizontal rig units - that reached an
all-time high of 1,193 in May this year - increased by 3 from last
week's level to 1,174.
BAKER-HUGHES (BHI): Free Stock Analysis Report
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