Zacks Analyst Blog Highlights: Baker Hughes, Transocean, Diamond Offshore, Patterson-UTI Energy and Helmerich & Payne

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

CHICAGO, March 30, 2011 /PRNewswire/ -- Analyst Blog features: Baker Hughes Inc. (NYSE: BHI), Transocean Inc. (NYSE: RIG), Diamond Offshore (NYSE: DO), Patterson-UTI Energy (Nasdaq: PTEN) and Helmerich & Payne (NYSE: HP).


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Here are highlights from Tuesday's Analyst Blog:

U.S. Rig Count Surges

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), primarily reflecting 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), Patterson-UTI Energy (Nasdaq: PTEN) 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 1,738 for the week ended March 25, 2011. This is up by 18 from the previous week's rig count and represents the fourth increase in as many weeks.

The current nationwide rig count is 98% higher than the 2009 low of 876 (set in the week ended June 12, 2009) and significantly exceeds the prior-year level of 1,444. It rose to a 22-year high in 2008, peaking to 2,031 in the weeks ending August 29 and September 12.

Rigs engaged in land operations climbed by 13 to 1,690, inland waters activity increased by 2 to 20, while offshore drilling rose by 3 this week to 28.

Natural Gas Rig Count

The natural gas rig count increased for the first time in four weeks to 880 (a gain of 5 rigs from the previous week). Despite the weekly improvement, the number of gas-directed rigs are down approximately 11% from the 18-month high reached during mid-August, 2010, when it hit 992, the highest since February 2009.

The current natural gas rig count remains 45% below its peak of 1,606 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 941 active natural gas rigs.

Oil Rig Count

The oil rig count was up by 12 to 851. The current tally – the highest in 23 years – is considerably more than the previous year's rig count of 489. It has recovered strongly from a low of 179 in June 2009, rising more than 4.5 times.

Miscellaneous Rig Count

The miscellaneous rig count (primarily drilling for geothermal energy), at 7, was up by 1 from the previous week.

Rig Count by Type

The number of vertical drilling rigs rose by 16 to 519, 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 2 to 1,219.

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