US Oil & Natural Gas Rig Tally Rises for 3 Straight Weeks

In its weekly release, Baker Hughes Company BKR reported an increase in the U.S. rig count from the prior week.

More on the Rig Count

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.

A change in the Houston-based oilfield service player’s rotary rig count impacts demand for energy services like drilling completion and production, provided by the likes of Halliburton Company HAL and Schlumberger Limited SLB.

Details

Total US Rig Count Rises: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 521 for the week through Sep 24,higher than the prior-week count of 512. Thus, the tally has increased for three successive weeks, marking the highest count since April 2020. The current national rig count is higher than the year-ago level of 261.

The number of onshore rigs for the week ended Sep 24 totaled 509, higher than the prior-week count of 505. In offshore resources, 10 rigs were operating, higher than the prior-week count of six.

US Oil Rig Count Increases: Oil rig count was 421 for the week ended Sep 24, higher than the prior-week count of 411. The current tally of oil rigs — far from the peak of 1,609 attained in October 2014 — is higher than the year-ago figure of 183.

Natural Gas Rig Count Declines in US: Natural gas rig count of 99 was lower than the prior-week count of 100. The count of rigs exploring the commodity was, however, higher than the prior-year week’s 75. Per the latest report, the number of natural gas-directed rigs is roughly 94% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 30 units, higher than the prior-week count of 29. 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 491 compared favorably with the prior-week level of 483.

Gulf of Mexico (GoM) Rig Count Increases: GoM rig count was 8 units, of which all were oil-directed. The count was higher than the prior-week tally of four.

Rig Count in Prolific Basins

Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 259, higher than the prior-week count of 258. The tally for oil drilling rigs in the basin increased for seven straight weeks. In the Eagle Ford shale play, the tally for oil drilling rigs rose to 35 from 34 in the prior week.

Outlook

The price of West Texas Intermediate crude is trading above the $75-per-barrel mark again. The commodity’s price is significantly higher than the pandemic-hit April last year, when oil was in the negative territory. With coronavirus vaccines being rolled out at a massive scale, the demand for fuel will possibly improve further. This has paved the way for further rig additions although drilling activities have slowed down as upstream players are mainly focusing on stockholder returns rather than boosting output.

Meanwhile, investors may keep an eye on energy stocks like Whiting Petroleum Corporation WLL and Earthstone Energy, Inc. ESTE. These are expected to benefit if oil price continues to stay healthy. While Whiting Petroleum sports a Zacks Rank #1 (Strong Buy), Earthstone Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Schlumberger Limited (SLB) : Free Stock Analysis Report

Halliburton Company (HAL) : Free Stock Analysis Report

Baker Hughes Company (BKR) : Free Stock Analysis Report

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Earthstone Energy, Inc. (ESTE) : Free Stock Analysis Report

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