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US Oil & Natural Gas Rig Tally Rises for 5 Straight Weeks

Baker Hughes' (BKR) data shows that the tally for oil drilling rigs in the Permian basin has increased for nine straight weeks.

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This story originally appeared on Zacks

In its weekly release, Baker Hughes Company BKR reported an increase in the U.S. rig count from the prior week.

- Zacks

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 service player’s rotary rig count impacts demand for energy services like drilling completion and production, provided by the likes of Halliburton Company HAL and Schlumberger Limited SLB.

Details

Total US Rig Count Rises: The count of rigs engaged in exploring and producing oil and natural gas in the United States was 533 for the week through Oct 8,higher than the prior-week count of 528. Thus, the tally has increased for five successive weeks, marking the highest count since April 2020. This implies that oil explorers continue to return to shale plays since the commodity’s price rose to the highest mark since 2014. The current national rig count is higher than the year-ago level of 269.

The number of onshore rigs for the week ended Oct 8 totaled 520, higher than the prior-week count of 513. In offshore resources, 11 rigs were operating, lower than the prior-week count of 13.

US Oil Rig Count Increases: Oil rig count was 433 for the week ended Oct 8, higher than the prior-week count of 428. The current tally of oil rigs — far from the peak of 1,609 attained in October 2014 — is higher than the year-ago figure of 193.

Natural Gas Rig Count Flat in US: Natural gas rig count of 99 was in line with the prior-week count. The count of rigs exploring the commodity was higher than the prior-year week’s 73. Per the latest report, the number of natural gas-directed rigs is roughly 94% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 28 units, lower than the prior-week count of 32. 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) of 505 compared favorably with the prior-week level of 496.

Gulf of Mexico (GoM) Rig Count Decreases: GoM rig count was 10 units, of which all were oil-directed. The count was lower than the prior-week tally of 11.

Rig Count in Prolific Basin

Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 265, higher than the prior-week count of 262. The tally for oil drilling rigs in the basin increased for nine straight weeks.

Outlook

The price of West Texas Intermediate crude is significantly higher than the pandemic-hit April last year when oil was in the negative territory. With coronavirus vaccines being rolled out at a massive scale, the demand for fuel will possibly improve further. This has paved the way for further rig additions, although drilling activities have slowed down as upstream players mainly focus on stockholder returns rather than boosting output.

Overall, the recovered oil pricing environment is favorable for exploration and production activities. Notable upstream players that are likely to capitalize on rising crude prices are Whiting Petroleum Corporation WLL and Continental Resources, Inc. CLR.



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Schlumberger Limited (SLB): Free Stock Analysis Report

 

Halliburton Company (HAL): Free Stock Analysis Report

 

Continental Resources, Inc. (CLR): Free Stock Analysis Report

 

Baker Hughes Company (BKR): Free Stock Analysis Report

 

Whiting Petroleum Corporation (WLL): Free Stock Analysis Report

 

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