The Zacks Analyst Blog Highlights: Baker Hughes, Diamond Offshore, Noble,
Patterson-UTI Energy and Helmerich & Payne
CHICAGO, Nov. 29, 2012
CHICAGO, Nov. 29, 2012 /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),
Diamond Offshore (NYSE:DO), Noble Corp. (NYSE:NE), Patterson-UTI Energy
(Nasdaq:PTEN) and Helmerich & Payne (NYSE:HP).
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Here are highlights from Wednesday's Analyst Blog:
U.S. Rig Count Rises by 8
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). This upside can be attributed to an
increase in the tally of gas-directed rigs, partially offset by decrease in
oil and miscellaneous rig counts.
The Baker Hughes rig count, issued since 1944, acts as an important yardstick
for drilling contractors such as
Diamond Offshore (NYSE: DO), Noble Corp. (NYSE: NE), Patterson-UTI Energy
(Nasdaq: PTEN), Helmerich & Payne (NYSE: HP), etc. in gauging the overall
business environment of the oil and gas industry.
Analysis of the Data
Rigs engaged in exploration and production in the U.S. totaled 1,817 for the
week ended November 21, 2012. This was up by 8 from the previous week's rig
count and indicates the third increase in as many weeks.
The current nationwide rig count is more than double than that of the 6-year
low of 876 (in the week ended June 12, 2009) though it is way below the
prior-year level of 2,000. 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 5 to 1,745, offshore drilling was
up by 3 to 53 rigs, while inland waters activity remained steady at 19 units.
Natural Gas Rig Count: The natural gas rig count – which slumped to a 13-year
low in early November – increased for the second successive week to 428 (a
gain of 11 rigs from the previous week). Despite the weekly improvement, the
number of gas-directed rigs is down 54% from its 2011 peak of 936, reached
In fact, the current natural gas rig count remains 73% below its all-time high
of 1,606 reached in late summer 2008. In the year-ago period, there were 865
active natural gas rigs.
Oil Rig Count: The oil rig count – which was at a 25-year high of 1,432 in
August – inched down by 2 to 1,388. Nevertheless, the current tally is way
above the previous year's rig count of 1,130. It has recovered strongly from a
low of 179 in June 2009, rising almost 8 times.
Miscellaneous Rig Count:
The miscellaneous rig count (primarily drilling for geothermal energy) at 1
was down by 1 from the previous week.
Rig Count by Type: The number of vertical drilling rigs fell by 1 to 509,
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 9 to 1,308. In
particular, horizontal rig units – that reached an all-time high of 1,193 in
May this year – increased by 9 from the last week's level to 1,114.
Among the companies mentioned above, Diamond Offshore, Noble, Patterson-UTI
Energy and Helmerich & Payne are all Zacks #3 Rank (Hold) stocks, implying
that these are expected to perform in line with the broader U.S. equity market
over the next one to three months.
However, Baker Hughes retains a Zacks #4 Rank, which translates into a
short-term Sell rating, while Transocean's Zacks #2 Rank means that the
offshore drilling contractor is likely to outperform the broader U.S. equity
market over the next one to three months.
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