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 upside can be attributed to
an increase in the tally of both oil and gas-directed rigs.
BAKER-HUGHES (BHI): Free Stock Analysis
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HELMERICH&PAYNE (HP): Free Stock Analysis
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PATTERSON-UTI (PTEN): Free Stock Analysis
TRANSOCEAN LTD (RIG): Free Stock Analysis
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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 gas industry.
Analysis of the Data
Rigs engaged in exploration and production in the U.S. totaled
1,809 for the week ended November 16, 2012. This was up by 3 from
the previous week's rig count and indicates the second increase
in as many weeks.
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 2,001. It rose to a 22-year
high in 2008, peaking at 2,031 in the weeks ending August 29 and
Rigs engaged in inland waters activity climbed by 3 to 19, while
land operations and offshore drilling remained steady at 1,740
and 50 rigs, respectively.
Natural Gas Rig Count:
The natural gas rig count recovered from a 13-year low -
increasing for the second time in 3 weeks - to 417 (a gain of 4
rigs from the previous week). Despite the weekly improvement, the
number of gas-directed rigs is down 55% from its 2011 peak of
936, reached during mid-October.
In fact, 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 871 active natural gas rigs.
Oil Rig Count:
The oil rig count - which was at a 25-year high of 1,432 in
August - inched up by 1 to 1,390. The current tally is way above
the previous year's rig count of 1,125. 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 2 was down by 2 from the previous week.
Rig Count by Type:
The number of vertical drilling rigs rose by 2 to 510, 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
1 to 1,299. In particular, horizontal rig units - that reached an
all-time high of 1,193 in May this year - increased by 1 from the
last week's level to 1,105.
Among the companies mentioned above, Transocean, 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.