(BHI) U.S. Natural Gas Drilling Hits 13-Yr Low

In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI) reported a dip in the U.S. rig count (number of rigs searching for oil and gas in the country).

This can be attributed to cutbacks in the tally of gas-directed rigs that dropped for the sixth straight week to touch another 13-year low, while oil drilling remained stable at its 25-year high level.

The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. (RIG), Diamond Offshore (DO), Noble Corp. (NE), Nabors Industries (NBR), Patterson-UTI Energy (PTEN), Helmerich & Payne (HP), etc. in gauging the overall business environment of the oil and gas industry.

Analysis of the Data

Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,959 for the week ended June 29, 2012. This was down by 7 from the previous week’s count and represents the third decrease in as many weeks.

Despite this, the current nationwide rig count is more than double that of the 6-year low of 876 (in the week ended June 12, 2009) and comfortably exceeds the prior-year level of 1,886. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.

Rigs engaged in land operations descended by 7 to 1,893, while inland waters activity and offshore drilling remained steady at 18 and 48 rigs, respectively.

Natural Gas Rig Count: The natural gas rig count decreased for the ninth time in 10 weeks to 534 (a drop of 7 rigs from the previous week). As per the most recent report, the number of gas-directed rigs is at their lowest level since August 20, 1999 and is down almost 43% from its 2011 peak of 936, reached during mid-October.

The current natural gas rig count remains 67% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 874 active natural gas rigs.

Oil Rig Count: The oil rig count remained unchanged at 1,421. The current tally – the highest since Baker Hughes started breaking up oil and natural gas rig counts in 1987 – is way above the previous year’s rig count of 1,006. It has recovered strongly from a low of 179 in June 2009, rising by nearly 8 times.

Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 4 remained unchanged from the previous week.

Rig Count by Type: The number of vertical drilling rigs fell by 15 to 553, 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) was up by 8 at 1,406. In particular, horizontal rig units – that reached an all-time high of 1,193 in May this year – increased by 6 from last week’s level to 1,171.

BAKER-HUGHES (BHI): Free Stock Analysis Report

DIAMOND OFFSHOR (DO): Free Stock Analysis Report

HELMERICH&PAYNE (HP): Free Stock Analysis Report

NABORS IND (NBR): Free Stock Analysis Report

NOBLE CORP (NE): Free Stock Analysis Report

PATTERSON-UTI (PTEN): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.

Comments

Powered by Facebook Comments


Similar Posts: | | | | | | | | | | | | | | Basic Materials | Oil and Gas Equipment and Services

RSS feeds: Baker Hughes Inc. | BHI | Diamond Offshore Drilling Inc | DO | Helmerich & Payne Inc | HP | Nabors Industries Limited | NBR | NE | Noble Corporation | Patterson-UTI Energy Inc | PTEN | RIG | Transocean Limited | Basic Materials | Oil and Gas Equipment and Services |

Other Posts by | RSS Feed for this author