North American land drillers and related services have been some of the biggest beneficiaries of the strong oil and gas prices, and more important, all signs point to a climbing rig count going forward, according to Raymond James’ latest Stat of the Week.

Analysts J. Marshall Adkins and James M. Rollyson noted that recent industry data indicates that both major operators and large independents now are contributing to the steady climb in the rig count. And, the largest 15 U.S. operators have shown the highest percentage increase in land drilling over the past six months.”

“These larger players now represent nearly 32% of total land drilling activity (or approximately 380 of the total 1,210 land rigs running) versus only about 27% last September,” the analysts wrote. “As this trend continues, and as the majors eventually incorporate higher sustainable commodity prices into their budgets and focus more on capital spending versus reducing debt, the rig count should continue to climb.”

Because of the higher rig counts, they said that rig utilization in turn will increase “in a tightening rig market and pricing improvements will follow, ultimately translating into earnings upside for our ‘Strong Buy’ rated land drillers.”

Raymond James reiterated “Strong Buy” ratings on Patterson-UTI Energy, Nabors Industries, Unit Corp. and Grey Wolf.

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