We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Permian Oil Rig Count Falls After 2 Straight Weeks of Increase
Read MoreHide Full Article
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 its comparison with a week-ago figure indicate 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 632 for the week ended Aug 25. The figure is lower than aweek-ago count of 642. The figure decreased for seven straight weeks, representing a slowdown in drilling activities. Some analysts think that shale producers are getting more efficient, therefore requiring fewer rigs. While some doubt whether some producers have enough prospective land to drill. The current national rig count is also lower than a year-ago level of 765.
Onshore rigs in the week ended Aug 25 totaled 613, lower than the prior week's count of 621. In offshore resources, 16 rigs were operating, lower than the prior week’s count of 17.
U.S. Oil Rig Count Falls: Oil rig count was 512 in the week ended Aug 25, lower than a week-ago figure of 520. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is down from a year-ago figure of 605.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 115 is lower than a week-ago figure of 117. The count of rigs exploring the commodity is below a year-ago week’s 158. Per the latest report, the number of natural gas-directed rigs is 92.8% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 15 units, lower than a week-ago count of 18. 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 617 is lower than the prior-week level of 624.
Gulf of Mexico (GoM) Rig Count Falls: GoM rig count was 15 units, all oil-directed. The count was lower than the prior-week number of 16.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 317, lower than the prior week's 323. The number decreased after increasing for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $75-per-barrel mark. Despite solid oil prices, there has been a slowdown in drilling activities, as upstream players are mainly focusing on stockholder returns rather than boosting output. Also, the inflationary environment can slow economic growth and thereby may lower crude demand. This, in turn, may affect drilling activities.
Despite all these odds, investors can keep a close eye on energy stocks like EOG Resources (EOG - Free Report) and Matador Resources Company (MTDR - Free Report) , as the 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.
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.
Matador Resources has a strong presence in the oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Promising oil price is likely to aid it in increasing production volumes. Matador acquired Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. MTDR, carrying a Zacks Rank of 3, expects the buyout to be accretive to important valuation and financial metrics.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Permian Oil Rig Count Falls After 2 Straight Weeks of Increase
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 its comparison with a week-ago figure indicate 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 632 for the week ended Aug 25. The figure is lower than aweek-ago count of 642. The figure decreased for seven straight weeks, representing a slowdown in drilling activities. Some analysts think that shale producers are getting more efficient, therefore requiring fewer rigs. While some doubt whether some producers have enough prospective land to drill. The current national rig count is also lower than a year-ago level of 765.
Onshore rigs in the week ended Aug 25 totaled 613, lower than the prior week's count of 621. In offshore resources, 16 rigs were operating, lower than the prior week’s count of 17.
U.S. Oil Rig Count Falls: Oil rig count was 512 in the week ended Aug 25, lower than a week-ago figure of 520. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is down from a year-ago figure of 605.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 115 is lower than a week-ago figure of 117. The count of rigs exploring the commodity is below a year-ago week’s 158. Per the latest report, the number of natural gas-directed rigs is 92.8% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 15 units, lower than a week-ago count of 18. 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 617 is lower than the prior-week level of 624.
Gulf of Mexico (GoM) Rig Count Falls: GoM rig count was 15 units, all oil-directed. The count was lower than the prior-week number of 16.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 317, lower than the prior week's 323. The number decreased after increasing for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $75-per-barrel mark. Despite solid oil prices, there has been a slowdown in drilling activities, as upstream players are mainly focusing on stockholder returns rather than boosting output. Also, the inflationary environment can slow economic growth and thereby may lower crude demand. This, in turn, may affect drilling activities.
Despite all these odds, investors can keep a close eye on energy stocks like EOG Resources (EOG - Free Report) and Matador Resources Company (MTDR - Free Report) , as the 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 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.
Matador Resources has a strong presence in the oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Promising oil price is likely to aid it in increasing production volumes. Matador acquired Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. MTDR, carrying a Zacks Rank of 3, expects the buyout to be accretive to important valuation and financial metrics.