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 oil-directed rigs, partially offset
by decrease in gas 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
1,762 for the week ended Feb 15, 2013. This was up by 3 from the
previous week's rig count and indicates the third increase in 4
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
1,994. 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 climbed by 3 to 1,691, while
inland waters activity offshore drilling remained steady at 16 to
55 rigs, respectively.
Natural Gas Rig Count:
The natural gas rig count - which slumped to a 13-year low in
early Nov 2012 - decreased for the third successive week to 421
(a drop of 4 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 7 to 1,337. The current tally is way
above the previous year's rig count of 1,272. It has recovered
strongly from a low of 179 in June 2009, rising 7.5 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 fell by 2 to 429 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
5 to 1,333. In particular, horizontal rig units - that reached an
all-time high of 1,193 in May 2012 - decreased by 4 from the last
week's level to 1,139.
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.