In its last weekly release, Baker Hughes Company BKR stated that the U.S. rig count was lower than the prior week’s figure. The rotary rig count, issued by BKR, is usually 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 week-ago figure indicates the demand trajectory for the company’s oilfield services from exploration and production companies.
With the weekly rig count falling, should investors keep an eye on leading oil and gas exploration companies like EOG Resources Inc. EOG and Matador Resources Company MTDR? Before diving into that, let's explore the latest rig count data details.
Baker Hughes’ Data: Rig Count in Detail
Total U.S. Rig Count Falls: The number of rigs engaged in the exploration and production of oil and natural gas in the United States was 582 in the week ended Nov. 27, lower than the week-ago count of 583. The current national rig count also declined from the year-ago level of 625, reflecting the fact that there has been a slowdown in drilling activities. Some analysts see this downside as a sign of increased efficiency among shale producers, who may need fewer rigs. However, there are doubts among a few about whether certain producers have sufficient promising land for drilling.
Onshore rigs in the week that ended on Nov. 27 totaled 567, lower than the prior week's count of 568. In offshore resources, 13 rigs were operating, in line with the week-ago count.
U.S. Oil Rig Count Declines: The oil rig count was 477 in the week ended Nov. 27, lower than the week-ago figure of 479. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — was also down from the year-ago figure of 505.
U.S. Natural Gas Rig Count Rises: The natural gas rig count of 100 exceeded the week-ago figure of 99. However, the count of rigs exploring the commodity was below the year-ago week’s tally of 116. Per the latest report, the number of natural gas-directed rigs is almost 94% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 16 units, in line with the week-ago count. However, the 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 566 was lower than the prior-week level of 567.
Rig Tally in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil and gas rig count of 303, in line with the week-ago figure. The count was, however, below the prior-year level of 314.
Handsome Oil Price Boosts Resilience: EOG, MTDR to Gain
West Texas Intermediate (WTI) crude is currently trading at more than $68 per barrel, presenting an advantageous landscape for exploration and production. Despite moderation in drilling activity as upstream companies prioritize stockholder returns over production growth, the favorable pricing environment remains beneficial for energy producers. U.S. oil and gas companies benefit from significantly lower breakeven WTI prices across all shale plays, particularly for existing wells. Furthermore, the average breakeven price for most new wells remains below current market levels, positioning upstream players for continued profitability in the current environment.
Breakeven WTI Price for US Producers
Image Source: Statista
Amid the backdrop, investors seeking medium to long-term gains may keep an eye on energy stocks like EOG Resources and Matador Resources.
In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company, carrying a Zacks Rank #3 (Hold), possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook.
Matador's strategic focus on record production and cost-saving techniques is driving higher profitability per barrel and reducing overall expenses, creating a solid foundation for sustained long-term growth. The recent acquisition of Ameredev assets and their rapid, successful integration — resulting in additional production and lower costs — highlights Matador's operational efficiency. Furthermore, proceeds from the sale of Piñon Midstream are expected to strengthen the financial flexibility of MTDR, which carries a Zacks Rank #3, by reducing leverage ratios. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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