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 Drilling Rig Count Falls For Two Straight Weeks
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 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 631 for the week ended Sep 1. The figure is lower than theweek-ago count of 632. The figure decreased for eight 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 the year-ago level of 760.
Onshore rigs in the week that ended on Sep 1 totaled 611, lower than the prior week's count of 613. However, in offshore resources, 17 rigs were operating, higher than the prior week’s count of 16.
U.S. Oil Rig Count Flat: Oil rig count was 512 in the week ended Sep 1, in line with the week-ago figure. 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 596.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 114 is lower than the week-ago figure of 115. The count of rigs exploring the commodity is below a year-ago week’s 162. Per the latest report, the number of natural gas-directed rigs is almost 93% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 14 units, lower than the week-ago count of 15. 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 in line with the prior-week level.
Gulf of Mexico (GoM) Rig Count Rises: GoM rig count was 16 units, all oil-directed. The count was higher than the prior-week number of 15.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 316, lower than the prior week's 317. The number decreased for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $85-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.
Hence, investors can keep a close eye on energy stocks like EOG Resources (EOG - Free Report) and Matador Resources Company (MTDR - 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 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 Drilling Rig Count Falls For Two Straight 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 its comparison with a week-ago 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 631 for the week ended Sep 1. The figure is lower than theweek-ago count of 632. The figure decreased for eight 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 the year-ago level of 760.
Onshore rigs in the week that ended on Sep 1 totaled 611, lower than the prior week's count of 613. However, in offshore resources, 17 rigs were operating, higher than the prior week’s count of 16.
U.S. Oil Rig Count Flat: Oil rig count was 512 in the week ended Sep 1, in line with the week-ago figure. 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 596.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 114 is lower than the week-ago figure of 115. The count of rigs exploring the commodity is below a year-ago week’s 162. Per the latest report, the number of natural gas-directed rigs is almost 93% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 14 units, lower than the week-ago count of 15. 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 in line with the prior-week level.
Gulf of Mexico (GoM) Rig Count Rises: GoM rig count was 16 units, all oil-directed. The count was higher than the prior-week number of 15.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 316, lower than the prior week's 317. The number decreased for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $85-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.
Hence, investors can keep a close eye on energy stocks like EOG Resources (EOG - Free Report) and Matador Resources Company (MTDR - 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 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.