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 both oil and natural gas-directed rigs.
The Baker Hughes rig count, issued since 1944, acts as an
important yardstick for drilling contractors such as
Transocean Inc.
(
RIG
),
Diamond Offshore
(
DO
),
Noble Corp.
(
NE
),
Nabors Industries
(
NBR
),
Patterson-UTI Energy
(
PTEN
),
Helmerich & Payne
(
HP
), etc. in gauging the overall business environment of the oil
and gas industry.
Analysis of the Data
Weekly Summary:
Rigs engaged in exploration and production in the U.S. totaled
1,811 for the week ended November 30, 2012. This was down by 6
from the previous week's rig count and indicates the first
decrease in 4 weeks.
Despite this, the current nationwide rig count is more than
double than that of the 6-year low of 876 (in the week ended June
12, 2009) though it is way below the prior-year level of 1,993.
It rose to a 22-year high in 2008, peaking at 2,031 in the weeks
ending August 29 and September 12.
Rigs engaged in land operations descended by 4 to 1,741, offshore
drilling was down by 3 to 50 rigs, while inland waters activity
increased by 1 to 20 units.
Natural Gas Rig Count:
The natural gas rig count - which slumped to a 13-year low in
early November - decreased for the first time in 3 weeks to 424
(a drop of 4 rigs from the previous week). As per the most recent
report, the number of gas-directed rigs is down 55% from its 2011
peak of 936, reached during mid-October.
The current natural gas rig count remains 74% below its all-time
high of 1,606 reached in late summer 2008. In the year-ago
period, there were 856 active natural gas rigs.
Oil Rig Count:
The oil rig count - which was at a 25-year high of 1,432 in
August - inched down by 2 to 1,386. Nevertheless, the current
tally is way above the previous year's rig count of 1,132. It has
recovered strongly from a low of 179 in June 2009, rising almost
8 times.
Miscellaneous Rig Count:
The miscellaneous rig count (primarily drilling for geothermal
energy) at 1 remained unchanged from the previous week.
Rig Count by Type:
The number of vertical drilling rigs fell by 1 to 508, 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 5 to 1,303. In particular, horizontal rig units - that reached
an all-time high of 1,193 in May this year - decreased by 4 from
the last week's level to 1,110.
Zacks Rank:
Among the companies mentioned above, Diamond Offshore, Noble,
Nabors, Patterson-UTI Energy and Helmerich & Payne are all
Zacks #3 Rank (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.
However, Baker Hughes retains a Zacks #4 Rank, which translates
into a short-term Sell rating, while Transocean's Zacks #2 Rank
means that the offshore drilling contractor is likely to
outperform the broader U.S. equity market over the next one to
three months.In
BAKER-HUGHES (BHI): Free Stock Analysis
Report
DIAMOND OFFSHOR (DO): Free Stock Analysis
Report
HELMERICH&PAYNE (HP): Free Stock Analysis
Report
NABORS IND (NBR): Free Stock Analysis Report
NOBLE CORP (NE): Free Stock Analysis Report
PATTERSON-UTI (PTEN): Free Stock Analysis
Report
TRANSOCEAN LTD (RIG): Free Stock Analysis
Report
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