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Permian Oil Rig Count Rises After Two Straight Weeks of Decline
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In its weekly release, Baker Hughes Company (BKR - Free Report) stated that the U.S. rig count was higher 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 Rises: 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 Sep 8. The figure is higher than theweek-ago count of 631. The figure increased after decreasing for eight straight weeks, representing a slowdown in drilling activities. Some analysts think that shale producers are getting more efficient, requiring fewer rigs, while some doubt whether certain producers have enough prospective land to drill. The current national rig count is, however, lower than the year-ago level of 759.
Onshore rigs in the week that ended on Sep 8 totaled 610, lower than the prior week's count of 611. However, in offshore resources, 19 rigs were operating, higher than the prior week’s count of 17.
U.S. Oil Rig Count Rises: Oil rig count was 513 in the week ended Sep 8, higher than the week-ago figure of 512. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is, however, down from the year-ago figure of 591.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 113 is lower than the week-ago figure of 114. The count of rigs exploring the commodity is also below a year-ago week’s 166. 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, in line with the week-ago 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 618 is higher than the prior-week level of 617.
Gulf of Mexico (GoM) Rig Count Rises: GoM rig count was 17 units, all oil-directed. The count was higher 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, higher than the prior week's 316. The number increased after decreasing for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $85-per-barrel mark. Solid oil prices will likely aid upstream energy players to add more rigs, but there may be a continuation in the 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.
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Permian Oil Rig Count Rises After Two Straight Weeks of Decline
In its weekly release, Baker Hughes Company (BKR - Free Report) stated that the U.S. rig count was higher 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 Rises: 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 Sep 8. The figure is higher than theweek-ago count of 631. The figure increased after decreasing for eight straight weeks, representing a slowdown in drilling activities. Some analysts think that shale producers are getting more efficient, requiring fewer rigs, while some doubt whether certain producers have enough prospective land to drill. The current national rig count is, however, lower than the year-ago level of 759.
Onshore rigs in the week that ended on Sep 8 totaled 610, lower than the prior week's count of 611. However, in offshore resources, 19 rigs were operating, higher than the prior week’s count of 17.
U.S. Oil Rig Count Rises: Oil rig count was 513 in the week ended Sep 8, higher than the week-ago figure of 512. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is, however, down from the year-ago figure of 591.
U.S. Natural Gas Rig Count Declines: Natural gas rig count of 113 is lower than the week-ago figure of 114. The count of rigs exploring the commodity is also below a year-ago week’s 166. 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, in line with the week-ago 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 618 is higher than the prior-week level of 617.
Gulf of Mexico (GoM) Rig Count Rises: GoM rig count was 17 units, all oil-directed. The count was higher 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, higher than the prior week's 316. The number increased after decreasing for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $85-per-barrel mark. Solid oil prices will likely aid upstream energy players to add more rigs, but there may be a continuation in the 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.