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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: DJB who wrote (46901)	6/25/1999 3:16:00 AM
From: cherrypitter	Respond to of 95453

From WSJ Interactive : June 24, 1999 Dow Jones Newswires Canada Oil Companies Seen Cautious Over Spending - Survey CALGARY -- The recent slump in crude oil prices continues to cast a shadow over Canada's oil patch and is making oil executives cautious about resuming higher levels of spending this year, a survey by Arthur Andersen Inc. indicates. Of 55 presidents and chief executives of Canadian oil and natural gas companies who responded in late May to the survey, 69% said their companies cut their 1999 capital spending budgets in response to low oil prices. Only 43% said the budgets were subsequently increased in response to rebounding oil prices. The executives seemed particularly reluctant to commit their companies to higher exploration spending. Only 24% said they plan to spend more this year than in 1998 on oil and natural gas exploration in Canada, against 32% who said they plan to decrease exploration spending and 32% who expect no change. On the other hand, 52% of the oil patch executives said they plan higher spending this year on oil and natural gas development, which involves less risk and is more likely to boost near-term production than exploration. That compares with 45% of respondents said they plan to spend more this year than in 1998 on acquiring oil and gas reserves. The percentage of executives planning to decrease spending in these categories were 22% and 21%, respectively. Harry English, an Aurthur Andersen partner, attributed the oil executives' conservative spending intentions to continued uncertainty over the Canadian oil industry's ability to attract capital. "We haven't seen a lot of equity flowing into the industry. It will take a bit of time before companies will be willing to spend more. They need the money in the bank first," he said at a news conference. Despite their apparent near-term caution, Canadian oil executives are switching their focus to drilling activity and away from cutting corporate costs, English said. The survey respondents ranked increased development and exploration as the top two areas likely to provide opportunities for their companies, followed by mergers and acquisitions. Of eight areas they were asked to consider, reducing general and administrative costs came last. Survey respondents mostly sensed greater opportunities for their companies in natural gas than in oil, with 92% per cent of respondents saying that significant natural gas reserves remain to be discovered in Canada, versus 50% believing that Canada holds significant undiscovered oil reserves. Over the next three years, 54% of the executives surveyed plan to focus exploration activities on natural gas, versus 42% seeking a balance between oil and gas exploration and 4% planning to focus on oil. -Tamsin Carlisle; 403-531-2911; dowjones@home.com