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Crash in Oil and Natural Gas Rig Count Pushes US Rigs Further Down (Part 7 of 10) (Continued from Part 6) Offshore rig count is down
In the previous article, we discussed the US onshore rig count. Last week, the offshore rig count decreased by three to 48. The offshore rig count is now 18 rigs shy of the four-year high of 66 it reached on August 29, 2014. In the last year, the offshore rig count fell by six. Nevertheless, the current offshore rig count is strong compared to its mid-2010 low of ~12.
Why the offshore rig count is strong
Offshore wells are more expensive, but they have much longer production lives. This means production is steady and can last for decades. Offshore wells also have long lead times, so falling crude oil prices won’t affect production in the short term. Unlike onshore shale rigs, offshore rigs respond slowly to a depressed crude oil price environment.
The offshore rig count can gauge the extent of energy exploration and the activity levels of integrated companies. Chevron Corporation (CVX), Anadarko Petroleum (APC), and Exxon Mobil (XOM) together account for 31.4% of the Energy Select Sector SPDR ETF (XLE). These energy companies operate in deepwater oilfields and benefit from higher offshore oil and gas production. CVX makes up 12.0% of the Vanguard Energy ETF’s (VDE) market capitalization.
In the next section of this series, we’ll learn more about US offshore rigs, with a focus on the drilling activity in the Gulf of Mexico.
Continue to Part 8 Browse this series on Market Realist:
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Anadarko
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CODE : APC |
ISIN : US0325111070 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Anadarko is a exploration company based in Canada. Anadarko is listed in Germany and in United States of America. Its market capitalisation is US$ 38.6 billions as of today (€ 34.5 billions). Its stock quote reached its lowest recent point on May 12, 1995 at US$ 10.00, and its highest recent level on May 23, 2014 at US$ 99.93. Anadarko has 531 000 000 shares outstanding. |