In its weekly release, Houston-based oilfield services company
Baker Hughes Inc. ( BHI ) reported a dip in
the U.S. rig count (number of rigs searching for oil and gas in the
country). This fall can be attributed to a decrease in the tally of
gas-directed rigs, partially offset by increase in oil rig
The Baker Hughes' data, issued since 1944, acts as an important
yardstick for drilling contractors like Transocean
Ltd. ( RIG
), Diamond Offshore Drilling Inc. ( DO ), Noble
Corp. ( NE
), etc. in gauging the overall business environment of the oil and
Analysis of the Data
Weekly Summary: Rigs engaged in exploration and
production in the U.S. totaled 1,752 for the week ended Mar 8,
2013. This was down by 5 from the previous week's rig count and
indicates the fourth decrease in 5 weeks.
Despite this, the current nationwide rig count is double that of
the lowest level reached in recent years (876 in the week ended
June 12, 2009), though it is way below the prior-year level of
1,973. It rose to a 22-year high in 2008, peaking at 2,031 in the
weeks ending Aug 29 and Sep 12.
Rigs engaged in land operations descended by 4 to 1,682, offshore
drilling was down by 1 to 51 rigs, while inland waters activity
remained 19 units.
Natural Gas Rig Count: Natural gas rig count
decreased for the fifth time in 6 weeks to 407 (a drop of 13 rigs
from the previous week). As per the most recent report, the number
of gas-directed rigs is at their lowest level since May 28, 1999
and is down 50% from its 2012 peak of 811.
The current natural gas rig count remains 75% below its all-time
high of 1,606 reached in late summer 2008. In the year-ago period,
there were 670 active natural gas rigs.BAKER-HUGHES (BHI): Free Stock Analysis ReportDIAMOND OFFSHOR (DO): Free Stock Analysis
ReportNOBLE CORP (NE): Free Stock Analysis ReportTRANSOCEAN LTD (RIG): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment
Oil Rig Count: The oil rig count - which was at a
25-year high of 1,432 in August last year - rose by 8 to 1,341. The
current tally is well above the previous year's rig count of 1,296.
It has recovered strongly from a low of 179 in June 2009, rising
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 427 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 1 to 1,325. In particular, horizontal
rig units - that reached an all-time high of 1,193 in May 2012 -
decreased by 11 from the last week's level to 1,130.
Zacks Rank: As of now, Transocean, Diamond
Offshore and Noble are all Zacks Rank #3 (Hold) stocks, implying
that these are expected to perform in line with the broader U.S.
equity market over the next one to three months.