In its weekly release, Houston-based oilfield services company
Baker Hughes Inc.
) 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 count.
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The Baker Hughes' rig count, issued since 1944, acts as an
important yardstick for drilling contractors like
), etc. in gauging the overall business environment of the oil
and gas industry.
Analysis of the Data
Rigs engaged in exploration and production in the U.S. totaled
1,757 for the week ended Mar 01, 2013. This was down by 4 from
the previous week's rig count and indicates the third decrease in
Despite this, the current nationwide rig count is more than
double than 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 1,989. 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 3 to 1,686, offshore
drilling was down by 1 to 52 rigs, while inland waters activity
remained 19 units.
Natural Gas Rig Count:
The natural gas rig count - which slumped to a 13-year low in
early Nov 2012 - decreased for the fourth time in 5 weeks to 420
(a drop of 8 rigs from the previous week). As per the most recent
report, the number of gas-directed rigs is down by 48% from its
2012 peak of 811. The current natural gas rig count remains 74%
below its all-time high of 1,606 reached in late summer 2008.
Oil Rig Count:
The oil rig count - which was at a 25-year high of 1,432 in
August last year - rose by 4 to 1,333. The current tally is above
the previous year's rig count of 1,293. It has recovered strongly
from a low of 179 in June 2009, rising 7.4 times.
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 rose by 7 to 431 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 11 to 1,326. In particular, horizontal rig units - that
reached an all-time high of 1,193 in May 2012 - increased by 1
from the last week's level to 1,141.
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.