Baker Hughes Reports U.S. Rig Count Increase to 544

Baker Hughes reports a 7-rig increase in the US rig count to 544 rigs.

Baker Hughes (BKR) reported a significant increase in the U.S. rig count this week, rising by seven to reach a total of 544 rigs [1]. This uptick marks the first time in 12 weeks that the rig count has increased, with the biggest weekly gain since December [1]. Despite the recent increase, the total rig count remains 42 rigs, or 7%, below the level seen a year ago [1].

The oil rig count fell by two to 422 this week, the lowest since September 2021, while gas rigs rose by nine to 117, the most since March 2024 [1]. In Texas, the biggest oil and gas-producing state, the rig count fell by two to 253, the lowest since October 2021. The Permian basin, the largest U.S. oil-producing shale formation, also saw a decline, with the rig count falling by two to 263, the lowest since October 2021. However, the Haynesville shale in Arkansas, Louisiana, and Texas saw a rise of three to 41, the most since March 2024 [1].

The decrease in rig count over the past two years has been attributed to lower U.S. oil and gas prices, prompting energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output [1]. However, analysts forecast that U.S. spot crude prices will decline for a third consecutive year in 2025, but the U.S. Energy Information Administration (EIA) projects crude output to rise from 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025 [1]. On the gas side, the EIA projects a 68% increase in spot gas prices in 2025, which is expected to prompt producers to boost drilling activity after a 14% price drop in 2024 [1].

Wall Street analysts have a positive outlook on Baker Hughes, with the average one-year target price for the company at $47.06, suggesting an upside of 20.18% from the current price of $39.16 [2]. The consensus recommendation from 26 brokerage firms is "Outperform," indicating strong confidence in the company's prospects [2]. GuruFocus estimates the GF Value for Baker Hughes to be $37.40, suggesting a downside of 4.49% from the current price [3].

In Canada, the rig count rose by ten over the past week, reaching a total of 172, with an increase of eight oil rigs and two gas rigs [3]. On an annual basis, Canada's rig count has dropped by 25, with a reduction of 14 oil rigs and ten fewer gas rigs [3].

References:
[1] https://finance.yahoo.com/news/us-drillers-add-oil-gas-175130996.html
[2] https://www.gurufocus.com/news/2988292/baker-hughes-bkr-sees-increase-in-us-rig-count-bkr-stock-news
[3] https://www.gurufocus.com/news/2988294/baker-hughes-bkr-sees-us-rig-count-increase-as-gas-rigs-rise-bkr-stock-news