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The Zacks Analyst Blog Highlights Baker Hughes, Diamondback Energy and Matador Resources

For Immediate Release

Chicago, IL – April 18, 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 Co. BKR, Diamondback Energy, Inc. FANG and Matador Resources Co. MTDR.

Here are highlights from Wednesday’s Analyst Blog:

Here's What Drawdown of US Oil & Gas Rigs Means

In its weekly release, Baker Hughes Co. 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.

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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 Falls: The number of rigs engaged in the exploration and production of oil and natural gas in the United States was 617 in the week ended Apr 12, lower than the week-ago count of 620. The current national rig count was also lower than the year-ago level of 748. This reflects the fact that there has been a slowdown in drilling activities. Many analysts believe that shale producers are getting more efficient, requiring fewer rigs, while some doubt whether certain producers have enough prospective land to drill.

Onshore rigs in the week that ended on Apr 12 totaled 598, lower than the prior week's count of 600. In offshore resources, 19 rigs were operating, which declined from the week-ago count of 20.

U.S. Oil Rig Count Falls: The oil rig count was 506 in the week ended Apr 12, decreasing from the week-ago figure of 508. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — is also down from the year-ago figure of 588.

U.S. Natural Gas Rig Count Declines: The natural gas rig count of 109 was lower than the week-ago figure of 110. The count of rigs exploring the commodity was also below the year-ago week’s 157. Per the latest report, the number of natural gas-directed rigs is almost 93.2% 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, flat 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 605 was lower than the prior-week level of 608.

Rig Count in the Most Prolific Basin

Permian — the most prolific basin in the United States — recorded a weekly oil and gas rig count of 316, lower than the week-ago figure of 317. The count is also below the prior-year level of 356.

Outlook

The West Texas Intermediate crude price is trading at more than the $80-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 like Diamondback Energy, Inc. and Matador Resources Co.

Diamondback Energy, a leading pure-play Permian operator, has reported ongoing enhancements in the average productivity per well in the Midland Basin. The exploration and production company is likely to continue witnessing increased production volumes. FANG, carrying a Zacks Rank #3 (Hold), also has an investment-grade balance sheet. 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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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Baker Hughes Company (BKR) : Free Stock Analysis Report

Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report

Matador Resources Company (MTDR) : Free Stock Analysis Report

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