The Zacks Analyst Blog Highlights Baker Hughes, EOG Resources and Diamondback Energy
For Immediate Release
Chicago, IL – March 2, 2023 – 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, EOG Resources EOG and Diamondback Energy, Inc. FANG.
Here are highlights from Wednesday’s Analyst Blog:
Permian Oil Rig Count Falls Second Straight Week
In its weekly release, Baker Hughes Company stated that the U.S. rig count was lower than the prior-week tally. 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 prior-week figure indicates the demand trajectory for Baker Hughes’ oilfield services from exploration and production companies.
Details
Total U.S. Rig Count Falls: The count of rigs engaged in the exploration and production of oil and natural gas in the United States was 753 for the week ended Feb 24. The figure is lower than the prior week’s count of 760. Thus, the tally decreased for two straight weeks. The current national rig count is, however, higher than the year-ago level of 650.
The onshore rigs in the week ended Feb 24 totaled 734, lower than the prior week's count of 741. In offshore resources, 17 rigs were operating, in line with the prior week’s count.
U.S. Oil Rig Count Falls: The oil rig count was 600 in the week ended Feb 24, lower than the prior-week figure of 607. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is, however, up from the year-ago figure of 522.
U.S. Natural Gas Rig Count Flat: Natural gas rig count of 151 is in line with the prior-week figure. The count of rigs exploring the commodity is higher than the prior-year week’s tally of 127. Per the latest report, the number of natural gas-directed rigs is 90.6% 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, lower than the prior-week count of 18 units. 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 737 is lower than the prior-week level of 742.
Gulf of Mexico (GoM) Rig Count Flat: GoM rig count was 17 units, all oil-directed. The count was in line with the prior-week number.
Rig Count in the Most Prolific Basin
Permian — the most prolific basin in the United States — recorded a weekly oil rig tally of 348, lower than the prior week's count of 349. Thus, the number decreased for two straight weeks.
Outlook
The West Texas Intermediate crude price is trading at more than the $75-per-barrel mark, which is still highly favorable for exploration and production activities. Solid oil prices will likely pave the way for rig additions despite a slowdown in drilling activities, as upstream players mainly focus on stockholder returns rather than boosting output.
Investors may keep a close eye on energy stocks like EOG Resources and Diamondback Energy, Inc., as these companies are expected to benefit from the current healthy oil price scenario.
EOG Resources, currently carrying a Zacks Rank #3 (Hold), is a leading oil and natural gas exploration and production company. It is well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EOG Resources is strongly committed to returning capital to shareholders. Since it transitioned to premium drilling, the company has returned a handsome amount in cash to stockholders. With the employment of premium drilling, EOG can reduce its cash operating costs per barrel of oil equivalent, thereby aiding its bottom line.
Diamondback Energy is a leading pure-play Permian operator. FANG has expanded its footprint in the Midland basin since it acquired all leasehold interest and associated properties of Lario Permian, LLC – a wholly owned affiliate of Lario Oil & Gas Company. FANG, with a Zacks Rank of 3, also has an investment-grade balance sheet.
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EOG Resources, Inc. (EOG) : Free Stock Analysis Report
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