The Zacks Analyst Blog Highlights Baker Hughes, SM Energy and Matador Resources
For Immediate Release
Chicago, IL – February 14, 2024 – 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 Company BKR, SM Energy Company SM and Matador Resources Company MTDR.
Here are highlights from Tuesday’s Analyst Blog:
Permian Oil Rig Count Down in 5 of Last 10 Weeks
In its weekly release, Baker Hughes Company stated that the U.S. rig count was higher 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.
Rig Count Data in Detail
Total U.S. Rig Count Rises: The number of rigs engaged in the exploration and production of oil and natural gas in the United States was 623 in the week ended Feb 9. The figure is higher than theweek-ago count of 619. The figure decreased in five of the past 10 weeks. Many analysts believe that there has been a slowdown in drilling activities since shale producers are getting more efficient, requiring fewer rigs, while some doubt whether certain producers have enough prospective land to drill. The current national rig count is, however, lower than the year-ago level of 761.
Onshore rigs in the week that ended on Feb 9 totaled 602, increasing from the prior week's count of 600. In offshore resources, 21 rigs were operating, higher than the week-ago count of 19.
U.S. Oil Rig Count Flat: The oil rig count was 499 in the week ended Feb 9, unchanged from the week-ago figure. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is down from the year-ago figure of 609.
U.S. Natural Gas Rig Count Rises: The natural gas rig count of 121 was higher than the week-ago figure of 117. The count of rigs exploring the commodity was, however, below the year-ago week’s 150. Per the latest report, the number of natural gas-directed rigs is 92.5% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 12 units, which is in line with the week-ago count. 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 611 rose from the prior-week level of 607.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig count of 307, unchanged from the week-ago figure. The number declined in five of the prior 10 weeks.
Outlook
The West Texas Intermediate crude price is trading above the $75-per-barrel mark. Although the commodity pricing scenario is favorable for exploration and production operations, there has been a slowdown in drilling activities, which may continue as upstream players are prioritizing stockholder returns rather than boosting output.
Amid the backdrop, investors seeking medium to long-term gains may keep an eye on energy stocks such as SM Energy Company and Matador Resources Company.
SM Energy, currently carrying a Zacks Rank #3 (Hold), is an oil and natural gas exploration and production company. It is well-placed to capitalize on the promising business scenario as it has a strong footprint in the prolific Midland Basin. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Matador Resources has a strong presence in the oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Promising oil prices are likely to aid it in increasing production volumes. Matador acquired Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. Zacks #3 Ranked MTDR expects the buyout to be accretive to important valuation and financial metrics.
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