In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (NYSE:BHI) reported a rise in the U.S. rig count (number of rigs searching for oil and gas in the country), primarily reflecting an increase in the land rig count.
The Baker Hughes rig counts, issued since 1944, act as an important yardstick for drilling contractors like Transocean Inc. (NYSE:RIG), Diamond Offshore (NYSE:DO), Noble Corp. (NYSE:NE), Pride International (NYSE:PDE), Nabors Industries (NYSE:NBR), Patterson-UTI Energy (NASDAQ:PTEN) and Helmerich & Payne (NYSE:HP) in gauging the overall business environment of the oil and gas industry.
Rigs exploration and production in the U.S. totaled 1,671 for the week ended October 8, 2010. This is up by 12 rigs from the previous week’s rig count and represents the highest level achieved this year. The current nation-wide rig count is 91% higher from the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,041. It rose to a 22-year high in 2008, peaking to 2,031 in the weeks ending August 29 and September 12.
Rigs engaged in land operations climbed by 10 rigs to 1,634, while inland waters and offshore activity expanded by a rig each to 17 and 20, respectively.
Natural Gas Rig Count
The natural gas rig count increased for the first time in three weeks to 971 rigs (a gain of 9 from the previous week). The current number of gas-directed rigs are just 21 short of an 18-month high reached during mid-August and have rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. Still, the rig count remains 40% below its peak of 1,606 in late summer 2008. In the year-ago period, there were 726 active natural gas rigs.
Oil Rig Count
The oil rig count was up by 3 rigs to 690, the tenth gain in the last 12 weeks. The current tally is considerably higher than the previous year’s rig count of 305. It has recovered nicely from a low of 179 in June 2009, nearly quadrupling in number.
Miscellaneous Rig Count
The miscellaneous rig count (primarily drilling for geothermal energy) at 10 remained unchanged from the previous week.
Rig Count by Type
The number of vertical drilling rigs was up 6 to 529, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) rose by 16 to 1,142.