The Zacks Analyst Blog Highlights: Baker Hughes, Transocean, Diamond Offshore, Noble and Helmerich & Payne

Oct 12, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Oct. 12, 2011 /PRNewswire/ -- 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: Baker Hughes Inc. (NYSE: BHI), Transocean Inc. (NYSE: RIG), Diamond Offshore (NYSE: DO), Noble Corp. (NYSE: NE) and Helmerich & Payne (NYSE: HP).

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Here are highlights from Tuesday's Analyst Blog:

U.S. Rig Count Goes Past 2000

In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (NYSE: BHI) reported a rise in the U.S. rig count (number of rigs searching for oil and gas in the country) to its highest level since September 19, 2008. This can be primarily attributed to an increase in the tally of land rigs.

The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. (NYSE: RIG), Diamond Offshore (NYSE: DO), Noble Corp. (NYSE: NE) and Helmerich & Payne (NYSE: HP) in gauging the overall business environment of the oil and gas industry.

Weekly Summary

Rigs engaged in exploration and production in the U.S. totaled 2,012 for the week ended October 7, 2011. This is up by 22 from the previous week's rig count and represents the third increase in 4 weeks.

The current nationwide rig count is more than double that of the 6-year low of 876 (in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,671. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.

Rigs engaged in land operations climbed by 17 to 1,961, offshore drilling increased by 3 to 34, while inland waters activity was up by 2 to 17 rigs.

Natural Gas Rig Count

The natural gas rig count increased for the second week in a row to 935 (a gain of 12 rigs from the previous week).  Despite the weekly improvement, the number of gas-directed rigs, which slid to a 16-month low of 866 in May this year but has since recovered to reach its highest level in more than nine months, is down approximately 6% from its 2010 peak of 992, reached during mid-August.

In fact, the current natural gas rig count remains 42% below its all-time high of 1,606 reached in late summer 2008, but has rebounded strongly after bottoming out to a 7-year low of 665 on July 17, 2009. In the year-ago period, there were 971 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 10 to 1,070. The current tally is considerably higher than the previous year's rig count of 690. It has recovered strongly from a low of 179 in June 2009, rising almost 6 times.

Miscellaneous Rig Count

The miscellaneous rig count (primarily drilling for geothermal energy) at 7 remained steady compared to the previous week.

Rig Count by Type

The number of vertical drilling rigs rose by 1 to 618, 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 up by 21 at 1,394. In particular, horizontal rig units rose by 13 in the latest week to hit a new all-time high of 1,148.

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