Zacks.com Analyst Blog features: Baker Hughes Inc. (NYSE: BHI), Transocean Inc. (NYSE: RIG), Diamond Offshore (NYSE: DO), Pride International (NYSE: PDE) and Patterson-UTI Energy (Nasdaq: PTEN).
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Here are highlights from Wednesday’s Analyst Blog:
U.S. Drilling Activity Improves
In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (NYSE: BHI) reported a rise in the U.S. rig count (number of rigs searching for oil and gas in the country), primarily reflecting an increase in the number of land rigs.
The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. (NYSE: RIG), Diamond Offshore (NYSE: DO), Pride International (NYSE: PDE) and Patterson-UTI Energy (Nasdaq: PTEN) in gauging the overall business environment of the oil and gas industry.
Weekly Summary
Rigs engaged in exploration and production in the U.S. totaled 1,714, up by 5 from the previous week’s count. The current nation-wide rig count is 96% higher than the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,178. It rose to a 22-year high in 2008, peaking to 2,031 in the weeks ending August 29 and September 12.
Rigs engaged in land operations climbed by 5 to 1,675, offshore drilling increased by 2 to 25, while inland waters activity dipped by 2 to 14.
Natural Gas Rig Count
The natural gas rig count decreased for the seventh time in eleven weeks to 931 rigs (a loss of 10 from the previous week). Despite the weekly decline, the number of gas-directed rigs are just 61 short of the 18-month high reached during mid-August, rebounding strongly after bottoming out to a 7-year low of 665 on July 17, 2009. Still, the rig count remains 42% below its peak of 1,606 in late summer 2008. In the year-ago period, there were 751 active natural gas rigs.
Oil Rig Count
The oil rig count was up by 15 to 771, the eighteenth gain in the last 23 weeks. The current tally is considerably higher than the previous year’s rig count of 416. It has recovered strongly from a low of 179 in June 2009, more than quadrupling in number.
Miscellaneous Rig Count
The miscellaneous rig count (primarily drilling for geothermal energy) at 12 remained unchanged from the previous week.
Rig Count by Type
The number of vertical drilling rigs was up by 11 to 546, 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) fell by 6 to 1,168.
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