The latest report from Baker Hughes indicates a rise in the U.S. rig count, reflecting a higher number of rigs engaged in oil and natural gas exploration. Here’s a detailed breakdown of the recent rig count data and its implications:
Rig Count Data in Detail
Total U.S. Rig Count:
- Current Count: 585 rigs (as of July 5)
- Previous Week: 581 rigs
- Year-Ago Count: 680 rigs
- Onshore Rigs: 562 (up from 560)
- Offshore Rigs: 23 (up from 21)
Oil and Gas Rig Count:
- Oil Rigs: 479 (unchanged from the previous week, down from 540 a year ago)
- Natural Gas Rigs: 101 (up from 97, down from 135 a year ago)
Drilling Type:
- Vertical Rigs: 18 (unchanged)
- Horizontal/Directional Rigs: 567 (up from 563)
Rig Count in the Permian Basin
- Current Count: 305 rigs (unchanged from the previous week, down from 342 a year ago)
Market Outlook
- Crude Oil Price: West Texas Intermediate crude trading above $80 per barrel
- Investor Focus: Upstream players are prioritizing stockholder returns over increasing output
- Recommended Stocks:
- Diamondback Energy (FANG): Enhancements in well productivity, potential increased production volumes, and significant footprint expansion with the pending Endeavor merger.
- Matador Resources (MTDR): Expanding footprint in the Delaware Basin with a $1.91 billion acquisition, projecting significant production growth.
The increase in the rig count, particularly in natural gas rigs, indicates a potential rise in exploration activities, albeit at a slower pace compared to the previous year. This trend, coupled with high crude prices, suggests a favorable environment for oilfield services, despite the overall slowdown in drilling activities. Investors may find opportunities in companies like Diamondback Energy and Matador Resources, which are poised for growth due to strategic expansions and enhanced operational efficiencies.
Oil & Gas List Bundles
