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

To: P.Prazeres who wrote (21389)	5/4/1998 8:38:00 PM
From: Robert Floyd	Read Replies (2) \| Respond to of 95453

INTERVIEW-Global Marine CEO takes bullish view By Andrew Kelly HOUSTON, May 4 (Reuters) - Offshore oil and gas driller Global Marine Inc. (GLM - news) sees a strong financial performance in 1998 and expects no shortage of drilling business to compete for in coming years, its chief executive said on Monday. ''It's going to be a very, very strong year for us,'' CEO Russel Luigs told Reuters in an interview at the Offshore Technology Conference (OTC) in Houston. Luigs said Global Marine had recontracted 22 drilling rigs so far this year at an average increase of 30 percent in dayrates, bringing in over $200,000 per day on aggregate in extra revenue. ''This is going to be by far the highest average dayrate, the highest revenue year we've had,'' he said. Luigs said Global Marine had a premium fleet, which he expected to remain fully utilized. ''The result with a premium fleet is that you get very high dayrates in a tight market and very high utilization in a sloppy market. We haven't had a rig off contract in years, and I don't see us with rigs off contract,'' he said. Luigs said the long-term fundamentals of supply and demand for oil and natural gas were favorable for contract drillers. Because of steady growth of demand for hydrocarbons and declining production rates from existing fields, the industry needed to add 5 percent of new output per year, he said. Another positive factor for drillers was the steady decline in the average size of new oil and gas fields, meaning that more wells had to be drilled to produce the same amount of fuel. Luigs said he expected the price of oil to recover soon to its longer-term average of $19 per barrel. In the meantime, the recent weakness in oil prices might lead to some hesitation on the part of exploration companies to commit themselves to new drilling programs. ''But it cannot reduce drilling for a significant period of time because demand is right behind you like a herd of elephants,'' he said.