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Permian Basin Drillers Add Crude Oil Rigs in 12 of 14 Weeks

In its weekly release, Baker Hughes Company BKR, a leading oilfield service provider, reported an increase in the U.S. rig count from the prior week. The rotary rig count, being issued by Baker Hughes, usually gets published in major newspapers and trade publications.

Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs and its comparison with the prior week tally indicates the trajectory of demand for BKR’s oilfield services from exploration and production companies.

Details

Total US Rig Count Rises: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 556 for the week through Nov 12,higher than the prior-week count of 550. Thus, the tally has increased for three successive weeks, marking the highest count since April 2020. The current national rig count is higher than the year-ago level of 312.

The number of onshore rigs for the week ended Nov 12 totaled 539, higher than the prior-week count of 535. In offshore resources, 15 rigs were operating, higher than the prior-week count of 13.

US Oil Rig Count Increases: Oil rig count was 454 for the week ended Nov 12, higher than the prior-week count of 450. The current tally of oil rigs — far from the peak of 1,609 attained in October 2014 — is higher than the year-ago figure of 236.

Natural Gas Rig Count Rises in US: Natural gas rig count of 102 was higher than the prior-week count of 100. The count of rigs exploring the commodity was higher than the prior-year week’s 73. Per the latest report, the number of natural gas-directed rigs is roughly 94% below the all-time high of 1,606 recorded in 2008.

Rig Count by Type: The number of vertical drilling rigs totaled 22 units, lower than the prior-week count of 25. 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 534 compared favorably with the prior-week level of 525.

Gulf of Mexico (GoM) Rig Count Increases: GoM rig count was 15 units, of which all were oil-directed. The count was higher than the prior-week tally of 13.

Rig Count in the Most Prolific Basin

Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 271, in line with the prior-week count. The tally for oil drilling rigs in the basin increased in 12 of the past 14 weeks.

Outlook

The price of West Texas Intermediate crude is trading above the $81-PER-BARREL mark again. The commodity’s price is significantly higher than the pandemic-hit April last year when oil was in the negative territory. With coronavirus vaccines being rolled out at a massive scale, the demand for fuel will possibly improve further. This has paved the way for further rig additions, although drilling activities have slowed down as upstream players are mainly focusing on stockholder returns rather than boosting output.

Meanwhile, investors may watch energy stocks like Whiting Petroleum Corporation WLL and Continental Resources, Inc. CLR. Both the companies are expected to benefit if oil price continues to stay healthy.

Whiting Petroleum is a leading upstream energy company and is the top producer of crude oil in North Dakota. With oil price improving at a healthy pace, Whiting Petroleum is expecting to continue to generate handsome cashflows while maintaining a healthy balance sheet.

Headquartered in Denver, CO, Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, WLL has gained 176.8% year to date, outpacing 111.7% improvement of the composite stocks belonging to the industry. WLL currently sports a Zacks Rank #1 (Strong Buy). You can see /www.zacks.com/stocks/buy-list/?ADID=zp_1link&ICID=zpi" target="_blank" rel="nofollow" rel="nofollow">https://www.zacks.com/stocks/buy-list/?ADID=zp_1link&ICI... _1link">the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources is also a leading upstream energy company with proven reserves in North Dakota and Oklahoma. The oil inventories of Continental Resources are among the best in the industry.

Headquartered in Oklahoma City, Continental Resources has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Considering the price chart, CLR has gained 194.7% so far this year, outpacing 111.7% improvement of the composite stocks belonging to the industry. Continental Resources currently carries a Zacks Rank #2 (Buy).


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Continental Resources, Inc. (CLR): Free Stock Analysis Report
 
Baker Hughes Company (BKR): Free Stock Analysis Report
 
Whiting Petroleum Corporation (WLL): Free Stock Analysis Report
 
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