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Permian Oil Drilling Rig Count Falls in 6 of the Past 7 Weeks
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In its weekly release, Baker Hughes Company (BKR - Free Report) stated that the U.S. rig count was lower than the prior-week figure. 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 comparison of the same with the prior-week figure indicates the demand trajectory for the company’s oilfield services from exploration and production companies.
Rig Count Data in Detail
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 675 in the week ended Jul 14. The figure is lower than the prior week’s count of 680. The figure decreased in 10 of the past 11 weeks. The current national rig count is also lower than the year-ago level of 756.
Onshore rigs in the week ended Jul 14 totaled 652, lower than the prior week's count of 657. In offshore resources, 18 rigs were operating, lower than the prior week’s count of 19.
U.S. Oil Rig Count Falls: Oil rig count was 537 in the week ended Jul 14, lower than the prior-week figure of 540. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is down from the year-ago figure of 599.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 133 is lower than the prior-week figure of 135. The count of rigs exploring the commodity is also below the prior-year week’s 153. Per the latest report, the number of natural gas-directed rigs is 91.7% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 17 units, higher than the prior-week count of 16. 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 658 is lower than the prior-week level of 664.
Gulf of Mexico (GoM) Rig Count Falls: GoM rig count was 18 units, all oil-directed. The count was lower than the prior-week number of 19.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 326, lower than the prior week's 330. The number decreased in six of the past seven weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $70-per-barrel mark, which is highly favorable for exploration and production activities. Solid oil prices will likely pave the way again 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 - Free Report) and Oceaneering International, Inc. (OII - Free Report) , as these 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.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned a handsome amount of 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.
Oceaneering International, sporting a Zacks Rank #1, is well placed on improving oil prices since it is a leading provider of engineered services and products and robotic solutions to the energy companies working offshore. Higher oil price is supporting increased upstream activities, which, in turn, will improve demand for Oceaneering’s drilling and completions support services.
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Permian Oil Drilling Rig Count Falls in 6 of the Past 7 Weeks
In its weekly release, Baker Hughes Company (BKR - Free Report) stated that the U.S. rig count was lower than the prior-week figure. 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 comparison of the same with the prior-week figure indicates the demand trajectory for the company’s oilfield services from exploration and production companies.
Rig Count Data in Detail
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 675 in the week ended Jul 14. The figure is lower than the prior week’s count of 680. The figure decreased in 10 of the past 11 weeks. The current national rig count is also lower than the year-ago level of 756.
Onshore rigs in the week ended Jul 14 totaled 652, lower than the prior week's count of 657. In offshore resources, 18 rigs were operating, lower than the prior week’s count of 19.
U.S. Oil Rig Count Falls: Oil rig count was 537 in the week ended Jul 14, lower than the prior-week figure of 540. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is down from the year-ago figure of 599.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 133 is lower than the prior-week figure of 135. The count of rigs exploring the commodity is also below the prior-year week’s 153. Per the latest report, the number of natural gas-directed rigs is 91.7% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 17 units, higher than the prior-week count of 16. 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 658 is lower than the prior-week level of 664.
Gulf of Mexico (GoM) Rig Count Falls: GoM rig count was 18 units, all oil-directed. The count was lower than the prior-week number of 19.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 326, lower than the prior week's 330. The number decreased in six of the past seven weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $70-per-barrel mark, which is highly favorable for exploration and production activities. Solid oil prices will likely pave the way again 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 - Free Report) and Oceaneering International, Inc. (OII - Free Report) , as these 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 transitioning to premium drilling, the company has returned a handsome amount of 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.
Oceaneering International, sporting a Zacks Rank #1, is well placed on improving oil prices since it is a leading provider of engineered services and products and robotic solutions to the energy companies working offshore. Higher oil price is supporting increased upstream activities, which, in turn, will improve demand for Oceaneering’s drilling and completions support services.