Cana Woodford Basin Witnesses Addition of 7 Oil Drilling Rigs

Shutterstock photo

In its weekly release, Baker Hughes, a GE company BHGE reported an increase in U.S. rig count.  

More on the Rig Count

Baker Hughes' data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.

A change in the Houston-based oilfield services players' rotary rig count impacts demand for energy services like drilling, completion and production provided by the likes of Halliburton Company HAL , Schlumberger Limited SLB , Diamond Offshore Drilling, Inc. DO and Transocean Ltd. RIG .


Total U.S. Rig Count Rises: Rigs engaged in the exploration and production of oil and natural gas in the United States totaled 1054 in the week ended Sep 28, higher than 1053 in the prior week. Notably, the rig count increased in five of the last 10 weeks.

Despite the rig count slipping to an all-time low of 404 in May 2016, it has been rising rapidly in U.S. shale resources. The current national rig count is considerably higher than the prior-year level of 940.   

For the week under review, the rise in rig count can be attributed to increased onshore operations. The number of onshore rigs totaled 1029, up from 1028. The tallies for both offshore and inland water rigs were in line with the counts for the week ended Sep 21. Five rigs operated in the inland waters last week, while the number of offshore rigs was 20.

US Removes 3 Oil Rigs: Oil rig tally was 863, down from 866 in the week ended Sep 21. However, the current total, though far from the peak of 1,609 attained in October 2014, is significantly higher than last year's 750.

Natural Gas Rig Tally Higher in US : The natural gas rig count of 189 is higher than 186 in the prior week. However, the tally was in line with the count in the year-ago quarter. Per the recent report, the number of natural gas-directed rigs is 88.2%, below the all-time high of 1,606 in 2008.

Rig Count by Type : The number of vertical drilling rigs was 63 units, down from the previous week's 65. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations also known as shale formations) increased by three units to 991.

Gulf of Mexico (GoM) Rig Count In line: The GoM rig count is 18 units, of which, 16 were oil-directed. The count is in line with the tally for the week ended Sep 21.


The number of rigs exploring Cana Woodford and Haynesville resources has increased. Cana Woodford added seven oil rigs, while two natural gas rigs were added in Haynesville basin.

Meanwhile, the West Texas Intermediate (WTI) crude pricing scenario is favorable for drillers as after crossing $70 a barrel, the commodity is now approaching the $75 psychological mark. The sanctions by the United States on the export of Iranian oil, which is likely to get implemented on Nov 4, is primarily backing oil price. Notably, countries like South Korea, Japan and France have already stopped importing oil from Iran.

Overall crude prices could rise further once Iran - the leading producer of oil - starts witnessing an additional fall in crude export volume from early November. Hence, the business scenario looks favorable for U.S. drillers although the pipeline bottleneck problem could hinder the pace of activities to a certain extent.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.  

See the pot trades we're targeting>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Schlumberger Limited (SLB): Free Stock Analysis Report

Halliburton Company (HAL): Free Stock Analysis Report

Transocean Ltd. (RIG): Free Stock Analysis Report

Diamond Offshore Drilling, Inc. (DO): Free Stock Analysis Report

Baker Hughes, a GE company (BHGE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: SLB , HAL , RIG , DO , BHGE

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?