| No Halt to US Rig Slide: Count Falls for Twenty-Eighth Week - Analyst Blog | |
| | |
|
In its weekly release, Houston-based oilfield services’ company Baker Hughes Inc. BHI reported a fall in the U.S. rig count (number of rigs searching for oil and gas in the country) yet again. This marks a record decline and the twenty-eighth one in a row.
This persistent decline can be blamed on a cutback in the tally of oil directed rigs, which saw further reduction and dropped to the lowest level since Sep 2010, in reaction to the steep drop in the commodity’s price since last summer.
Apart from indicating a brake in shale drilling activities, this is seen as a precursor to a slowdown in oil production, which is expected to lead to a subsequent drop in the commodity’s bloated supply level.
Taking cues from here, crude prices recovered substantially after sinking to a 6-year low of under $44-a-barrel in March. The West Texas Intermediate (WTI) oil futures are currently trading at around $60 per barrel.
Analysis of the Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 857 for the week ended Jun 19, 2015. This was down by two from the previous week’s rig count and indicates the lowest level in almost six years.
Following the latest decline, the current nationwide rig count is now less than half the prior-year level of 1,858. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ended Aug 29 and Sep 12.
Rigs engaged in land operations were flat with the previous week at 825. Inland waters’ activity was also flat at 5 rigs while offshore drilling was down by 2 to 27 units.
Natural Gas Rig Count: The count increased by 2 to 223. As per the most recent report, the number of natural gas-directed rigs is down almost three-fourth from its recent peak of 811 reached in 2012. In fact, the current natural gas rig count remains 86% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 311 active natural gas rigs.
Oil Rig Count: The count which rocketed to the highest figure of 1,609 in Oct 2014 since Baker Hughes started breaking up oil and natural gas rig counts in 1987, slipped further (by 4) to 631. As a result, the current tally is now the lowest in more than four and a half years and well below the previous year’s rig count of 1,545.
Miscellaneous Rig Count: The count (primarily drilling for geothermal energy) was unchanged from the previous week at 3.
Rig Count by Type: The number of vertical drilling rigs was down by 1 to 100, 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 down by 1 to 757.
Gulf of Mexico (GoM): The GoM rig count was down by 2 to 27.
Conclusion
Key Barometer of Drilling Activity: The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.
An increase or decrease in the Baker Hughes rotary rig count weighs heavily on the demand for energy services – drilling, completion, production, etc. – provided by companies that include large-cap names like Halliburton Co. HAL, Schlumberger Ltd. SLB and Weatherford International plc WFT. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BAKER-HUGHES (BHI): Free Stock Analysis Report SCHLUMBERGER LT (SLB): Free Stock Analysis Report WEATHERFORD INT (WFT): Free Stock Analysis Report HALLIBURTON CO (HAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
|
|
| |
ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Halliburton is a and oil producing company based in United states of america. Halliburton is listed in United States of America. Its market capitalisation is US$ 33.4 billions as of today (€ 31.2 billions). Its stock quote reached its lowest recent point on January 25, 2002 at US$ 10.06, and its highest recent level on April 26, 2024 at US$ 38.54. Halliburton has 867 249 984 shares outstanding. |