Home / Oil & Energy / Oil & Companies News / Permian Basin Adds Oil Drilling Rigs for 9 Straight Weeks

Permian Basin Adds Oil Drilling Rigs for 9 Straight Weeks

In the weekly release, Baker Hughes Company BKR reported an increase in the U.S. rig count.

More on the Rig Count

Baker Hughes’ data, which is issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry.

A change in the Houston-based oilfield service player’s rotary rig count affects demand for energy services like drilling, completion and production, provided by the likes of Halliburton Company HAL, Schlumberger Limited SLB and Transocean Ltd. RIG.

Details

Total U.S. Rig Count Increases: The count of rigs engaged in exploration and production of oil and natural gas in the United States was 346 for the week through Dec 18 versus the prior-week count of 338. Thus, the tally has increased for four weeks in a row, indicating that oil and gas drillers are gradually returning to domestic shale plays. However, the current national rig count is below the year-ago level of 813.

The number of onshore rigs for the week ending Dec 18 totaled 328 compared with the prior-week count of 323. Notably, the count of rigs operating in inland waters was two, same as the prior-week tally. Moreover, in the offshore resources, 16 rigs were operating, higher than the prior-week count of 13.

The U.S. Adds 5 Oil Rigs: Oil rig count was 263 for the week through Dec 18 compared with 258 in the week ended Dec 11. Importantly, the tally has been the highest since May. Investors should also note that the current tally of oil rigs — far from the peak of 1,609 attained in October 2014 — is, however, below the year-ago level’s 658.

Natural Gas Rig Count Increases in the U.S.: Natural gas rig count of 81 was higher than the prior-week count of 79. However, the count of rigs exploring the commodity was below the prior-year week’s 125. Importantly, per the latest report, the number of natural gas-directed rigs is 95% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 17 units, higher than the prior-week count of 15. Moreover, horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 329 compared favorably with the prior-week level of 323.

Gulf of Mexico (GoM) Rig Count Increases: The GoM rig count was 16 units, of which all were oil-directed. The count was higher than the prior-week tally of 13.

Rig Count in Prolific Basin

Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 173 versus the prior-week count of 168. Thus, the basin has been adding oil drilling rigs for nine straight weeks.

Outlook

Although the West Texas Intermediate crude price — approaching $48 per barrel — is significantly below the price of more than $60 at the beginning of 2020, the commodity price has improved considerably over the past few months. The momentum is likely to continue since the rolling out of the coronavirus vaccine has already started in the United States, raising hopes that fuel demand will recover soon.

Meanwhile, investors may keep an eye on two energy stocks that are expected to benefit if the oil price rally sustains — Devon Energy Corporation DVN and Diamondback Energy Inc. FANG. Both the stocks carry a Zacks Rank #3 (Hold).

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Source: Zacks

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping