Chicago, IL – March 31, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Baker Hughes Inc. (BHI-Free Report), Halliburton Co. (HAL-Free Report), Schlumberger Ltd. (SLB-Free Report) and Weatherford International plc (WFT-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
U.S. Gas Drilling Lowest on Record
In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI-Free Report) reported another fall in the U.S. rig count (number of rigs searching for oil and gas in the country) – the sixteenth such decline in a row.
This can be attributed to cutbacks in the tally of both oil and gas-directed rigs on the back of depressed prices. Talking numbers, oil rig count dropped to the lowest level since Mar 2011, while those for natural gas were the least at least since 1987.
Analysis of the Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,048 for the week ended Mar 27, 2015. This was down by 21 from the previous weeks rig count and indicates the lowest level in almost 5½ years.
Following the latest decline, the current nationwide rig count is now well below the prior-year level of 1,809. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending Aug 29 and Sep 12.
Rigs engaged in land operations – which fell by 20 to 1,010 – were the primary reason for the weekly rig count plunge. Meanwhile, offshore drilling was down by 3 to 34 rigs, while inland waters activity increased by 2 to 4 units.
Natural Gas Rig Count: The natural gas rig count decreased for the eighth time in as many weeks to 233 (a drop of 9 rigs from the previous week). As per the most recent report, the number of natural gas-directed rigs is at their lowest level on record and is down 71% from its recent peak of 811, achieved in 2012.
In fact, the current natural gas rig count remains 85% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 318 active natural gas rigs.
Oil Rig Count: The oil rig count that rocketed to 1,609 in Oct 2014, the highest since Baker Hughes started breaking up oil and natural gas rig counts in 1987, dived further (by 12) to 813. As a result of this drop, the current tally is now the lowest in 4 years and well below the previous year’s rig count of 1,487.
Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 2 remained unchanged from the previous week.
Rig Count by Type: The number of vertical drilling rigs decreased by 4 to 144, 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 17 to 904. In particular, horizontal rig units decreased by 17 from last week’s level to 812.
Gulf of Mexico (GoM): The GoM rig count was down by 2 to 33. The number of oil drilling rigs decreased by 2 to 24, while gas rigs remained flat at 9 units.
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 heavily weighs on the demand for energy services – drilling, completion, production, etc. – provided by companies that include large-cap names like Halliburton Co. (HAL-Free Report), Schlumberger Ltd. (SLB-Free Report) and Weatherford International plc (WFT-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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