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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Malcolm Winfield who wrote (10804)	6/20/2002 9:07:04 AM
From: Tomas	Read Replies (1) \| Respond to of 206201

Oilfield services sharpening drill bits -- Sector expects revival on oil producers' improved finances National Post, Thursday, June 20 By Tony Seskus CALGARY - Canada's oilfield service companies, which have seen earnings shrink this year with a downturn in drilling activity, expect oil prices and U.S. economic recovery will spur a revival in the sector before the end of 2002. The oilfield service industry, which includes such heavyweights as Precision Drilling Corp. and Ensign Resources Service Group Inc., has seen business slump from a record year in 2001 due to the reduced capital plans budgeted by petroleum producers last fall when oil and gas prices sagged. But, as reported in yesterday's Financial Post, producers expect to post strong financial results in the second quarter due to improved commodity prices. "People are fairly optimistic here for the balance of 2002 and into 2003," said Zane Reiter, a senior official with the Petroleum Services Association of Canada, which is hosting an investment symposium ending today in Calgary. "Producers did their budgets last year when oil prices were around US$18 to US$20 per barrel and now it's sitting around US$25. There's a bit more leeway in their capital budgets ... that helps the service side tremendously." Mr. Reiter said he expects the service sector to see improvements by the end of the year. "I think [the producers] will hold on to [the windfall], but coming into the fourth quarter and into next year they will start spending it," Mr. Reiter said in an interview, adding most of the drilling will be for natural gas. Murray Mullen, chairman of Mullen Transportation Inc., an Alberta-based oilfield services and trucking company, said drilling hit bottom in May and there is now hope for a turnaround. He said his company is now monitoring the U.S. economy closely for sustained strength. "Growth in the economy leads to growth in energy which leads to good commodity prices," he said. "Following that logic, we're relatively bullish. So, in my opinion, it's still dependent upon whether the U.S. economy maintains a healthy base." Dean Livingstone, chief executive of Alberta-based NQL Drilling Tools Inc., anticipates drilling activity will take off at the end of August. About 43% of NQL's revenues will come out of the United States, he said. "Definitely, things look better than they did in January," Mr. Livingstone said. "I think most oilfield companies are looking for a better year ahead, but we still want to be a little bit cautious. If oil prices get too high, too fast, it could slow any momentum you are gaining in the economy in the U.S." nationalpost.com{DD5086DF-2EFD-4A46-A43A-CADBF48820AD}