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

To: BigBull who wrote (58927)	1/22/2000 5:39:00 PM
From: ldo79	Respond to of 95453

BB - drillers doing well up north. 1/22 15:23 Canadian Drillers Deluged With Business as Oil Prices Soar By Scott Haggett Canadian Drillers Deluged With Business as Oil Prices Soar Calgary, Alberta, Jan. 22 (Bloomberg) -- Ensign Resource Services Group Inc., an Alberta-based driller of petroleum wells, can't find enough workers to man its rigs. Similarly, DC Energy Services Inc. is turning away business -- unthinkable a year ago when prices were less than half what they are now. To lure ``roughnecks,' as oil-rig workers are called, to Canada's frozen north, Ensign recently posted a toll-free number for job applicants. DC Energy is renting trucks and storage tanks from rivals to handle the extra workload. Business is booming for the industry that services oil producers, which are increasing exploration and output to profit from steadily rising oil prices over the past year. Oil now trades at $28.20 a barrel on the New York Mercantile Exchange, near the highest in nine years. The shortages in labor and some equipment are leading to a kind of happy frustration among executives in the oil-related businesses of western Canada. ``You can get a lot coming at you all at once,' said Alex Lambert, chief operating officer of Calgary-based DC Energy, which leases heavy equipment, and provides trucking and other services to petroleum companies. ``Trying to manage fatigue is a big thing right now.' The demand comes during what is already the busiest time of the year for oil-service companies. Many oil wells are in remote areas that can only be reached when the ground is frozen. A recent cold snap dropped temperatures to 40 degrees below zero Celsius in northern Alberta, making it easier to get rigs into the field. ``You need the cold weather and we haven't had that until recently,' said Miles Lich, an analyst with Peters & Co. in Calgary. The good times crept up on Ensign and closely held DC Energy, which like many in the boom and bust industry are leery of hiring too quickly. The increase in the number of rigs shows just how fast their fortunes can change. In western Canada, a record 551 drilling rigs were active last month, according to the Canadian Association of Oilwell Drilling Contractors, a trade group. That tops the previous high of 538 in February 1998 and is 41 percent more than the 390 that were operating this time last year. Coffers Full Rising oil prices have swollen the coffers of petroleum companies and the businesses that service them. Calgary-based Ensign, which earned C$0.47 ($0.33) a share in 1999's first quarter, is expected to make C$0.79 a share in the current quarter, according to four analysts surveyed by IBES International Inc. That would be the company's highest profit in two years. Ensign stock more than doubled last year and has risen 11 percent so far this year. Earnings would be even better except that the cost of renting a drilling rig hasn't reached the levels of 1997 and 1998. Companies like Ensign added rigs in those years on expectations that the last surge in prices would endure. Ninety-three percent of Canada's total rig fleet of 590 is rented, according to the oil drillers' trade group. Some analysts say the rental rate for the most basic type drilling rig is about C$9,000 a day, 14 percent below the C$10,500 of two years ago. ``We've seen pricing recover nicely but its nowhere near a peak level,' said Glenn Dagenais, Ensign's chief financial officer. Roughnecks make about C$15 an hour, a wage that has been pretty steady in recent years as Canada's farm crisis in nearby Saskatchewan and Manitoba swells the labor pool. We're running into problems getting crews,' Dagenais said. ``It's busy.' DC Energy's Lambert said he hasn't had the same problem attracting staff. He said he chose not lay off staff last year when low oil prices slashed business." ------------------------------------------------------------ I haven't gotten out completely yet. Regards, ldo79