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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (33850)	8/29/2001 4:04:02 PM
From: Johnny Canuck	Read Replies (2) \| Respond to of 69822

Wednesday, August 29, 2001 Drilling drop Oilpatch activity falls below forecasts By TODD NOGIER, BUSINESS EDITOR Oilpatch activity is down 30% from forecasts as producers catch their breath and assess how plunging natural gas prices will impact the bottom line, says an industry leader. And experts say falling oil and gas activity will cut into Alberta's economic growth this year and next, in lock step with a slowdown in the rest of the country. Don Herring, president of the Canadian Association of Oilwell Drilling Contractors, said the average number of drilling and service rigs active in the field has plunged to about 350 from the projected 500 this quarter. "My sense is that falling commodity prices are starting to have an impact on activity in the field," Herring said yesterday. The association was among many experts who projected record activity in the oilpatch in 2001, but when natural gas prices plummeted earlier this year -- from a high of $10 US per million British thermal units to yesterday's $2.41 US on the New York Mercantile Ex-change -- most had to ratchet down their ex-pectations. If the slowing trend continues for the rest of the year, the Canadian oilpatch would see about 16,500 wells drilled, down almost 3,000 from the association's 2001 forecast, Herring estimated, adding, "it's not the record year but it's still a very good year." A cooled oilpatch will translate into a slower Alberta economy, an economist warned yesterday. TD Bank's Derek Burleton said he expects lower natural gas prices to rein in a runaway Alberta economy to about 3.8% next year, from 4.2% this year and a scorching 6% last year. "Having said that, Alberta will remain at or near the top of the nation in growth next year," he said. Keeping the Alberta economy atop its lofty perch, said Burleton, will be consumer spending. Falling interest rates will maintain Albertans' spendthrift ways next year, propping up the wider provincial economy.