In its weekly release, Baker Hughes Company (BKR Quick QuoteBKR - Free Report) stated that the U.S. rig count was lower than the prior-week tally. The rotary rig count, issued by BKR, is usually published in major newspapers and trade publications.

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. The number of active rigs and its comparison with the prior-week figure indicates the demand trajectory for Baker Hughes’ oilfield services from exploration and production companies.

Details

Total U.S. Rig Count Falls: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 776 for the week ended Dec 16. The figure is lower thanthe prior week's count of 780. Thus, the tally increased in six of the prior 10 weeks. The current national rig count is higher than the year-ago level of 579.

The onshore rigs in the week ended Dec 16 totaled 759, lower than the prior-week count of 760. In offshore resources, 15 rigs were operating, lower than the prior week’s count of 18.

U.S. Oil Rig Count Declines: The oil rig count was 620 for the week ended Dec 16, lower than the prior-week figure of 625. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is, however, up from the year-ago figure of 475.

U.S. Natural Gas Rig Count Rises: Natural gas rig count of 154 was higher than the prior-week figure of 153. The count of rigs exploring the commodity is higher than the prior-year week’s tally of 104. Per the latest report, the number of natural gas-directed rigs is 90.4% lower than the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 26 units, in line with the prior-week count. 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) of 750 is lower than the prior-week level of 754.

Gulf of Mexico (GoM) Rig Count Declines: GoM rig count was 15 units, all oil-directed. The count was lower than the prior-week number of 18.

Rig Count in the Most Prolific Basin

Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 347, higher than the prior week's count of 346. The tally increased in five of the prior 10 weeks.

Outlook

The West Texas Intermediate crude price is trading at more than the $70-per-barrel mark, which is still highly favorable for exploration and production activities. Solid oil prices will likely pave the way for rig additions despite a slowdown in drilling activities, as upstream players mainly focus on stockholder returns rather than boosting output.

Investors may keep a close eye on energy stocks like EOG Resources (EOG Quick QuoteEOG - Free Report) and Devon Energy Corporation (DVN Quick QuoteDVN - Free Report) , as these companies are expected to benefit from the current healthy oil price scenario.

EOG Resources, currently carrying a Zacks Rank #3 (Hold), is a leading oil and natural gas exploration and production company. It is well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EOG Resources is strongly committed to returning capital to shareholders. Since it transitioned to premium drilling, the company has returned $10.4 billion in cash to stockholders. With the employment of premium drilling, EOG can reduce its cash operating costs per barrel of oil equivalent, thereby aiding its bottom line.

Devon Energy is a well-known upstream energy firm with a strong multi-basin portfolio. Delaware basin is among the basins that contribute significant oil equivalent production to DVN.

The Zacks Rank #3 firm, Devon Energy, has a prolific multi-decade inventory, posing a solid production outlook.