In its weekly release, Houston-based oilfield services company Baker Hughes Inc. ([stock]BHI[/stock]) 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 tally of land rigs.
The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. ([stock]HP[/stock]) 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 1,782 for the week ended April 8, 2011. This is up by 6 from the previous week’s rig count and represents the highest level since December 12, 2008.
The current nationwide rig count is more than double that of the 6-year low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,476. 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 6 to 1,735, while offshore drilling increased by 1 to 28. However, inland waters activity descended by 1 to 19 rigs.
Natural Gas Rig Count
The natural gas rig count decreased for the first time in three weeks to 889 (a drop of 2 rigs from the previous week). As per the most recent report, the number of gas-directed rigs are down approximately 10% from the 18-month high reached during mid-August, 2010, when it hit 992, the highest since February 2009.
The current natural gas rig count remains 45% below its peak of 1,606 in late summer 2008, but has rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. In the year-ago period, there were 959 active natural gas rigs.
Oil Rig Count
The oil rig count was up by 9 to 886. The current tally – the highest in 23 years for a fifth week – is considerably more than the previous year’s rig count of 505. It has recovered strongly from a low of 179 in June 2009, rising almost 5 times.
Miscellaneous Rig Count
The miscellaneous rig count (primarily drilling for geothermal energy), at 7, was down by 1 from the previous week.
Rig Count by Type
The number of vertical drilling rigs rose by 12 to 543, 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 down by 6 to 1,239.
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