[The Wall Street Journal Interactive Edition]
Dow Jones Newswires -- November 13, 1997
UTI, Patterson Energy Dn; Gas Levels, Seasonality Cited
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By GASTON F. CERON
Dow Jones Newswires
NEW YORK -- Drilling-services providers UTI Energy Corp. (UTI)
and Patterson Energy Inc. (PTEN) came under pressure Thursday,
with the selling activity apparently motivated by
higher-than-expected levels of gas in storage and a seasonal
slowdown in rig orders.
On Wednesday, the American Gas Association announced that total
U.S. working gas in storage for the week ended Nov. 11 was 2,814
billion cubic feet, up 7 Bcf from the previous week.
James Wicklund, an analyst at Rauscher Pierce Refsnes Inc., said
he was expecting a 15 to 20 Bcf decrease from the previous week.
The unexpected rise in gas in storage indicates that demand was
met and that producers still had gas left over to store away - a
bearish sign as the winter season begins, a time when demand for
gas is expected to be strong to the point of causing withdrawals
from storage facilities.
Although Wicklund regarded the event as more of an aberration
than anything else, he said it does give some credence to those
who have been speculating that the weather disturbance known as
El Nino will bring about a milder winter, reducing the demand for
gas.
Among other factors that may be keeping the shares of the
drilling-service companies down, Wicklund pointed to the slowing
of rig orders as oil companies plan for the first few months of
1998, a time of year when drilling activity typically slumps.
The analyst cautioned that seeing this trend as bearish on
rig-providers like UTI and Patterson would be wrong, as it is a
seasonal pattern seen year after year. But he said investors may
have misinterpreted the situation.
UTI's AMEX-listed shares closed at 38 15/16, down 4 1/8, or 9.6%.
Patterson closed at 46 3/4, down 4 13/16, or 9.3%.
UTI and Patterson officials couldn't immediately be reached for
comment.
- Gaston F. Ceron; 201-938-5174
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Current quote for: PTEN | UTI
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