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

To: Razorbak who wrote (45599)	5/27/1999 7:01:00 PM
From: Tomas	Respond to of 95453

Drill rigs ready to roll. End of spring road bans, rising prices spark activity Calgary Herald, May 27 By Stephen Ewart Spring is unofficially over in the oilpatch and the rig count is rising. The number of working rigs in the field across Western Canada shot up to 104 this week from 47 last week. The May long weekend is traditionally the end of road bans on heavy equipment and drilling begins to emerge from its springtime doldrums. This year was notably bad. "The spring was really wet so there were even fewer rigs than normal that worked through breakup," Janet Spensley, a service sector analyst for FirstEnergy Capital Corp., said Wednesday. The service sector is looking to this week as a turning point in what it is counting on being a turnaround year in the oilpatch after months of stubbornly low oil prices. "It's certainly much more optimistic out there than it was three months ago," said Bob Geddes, the president of the Canadian Association of Oilwell Drilling Contractors. "We had no place to go but up." Indeed, wet weather added to the woes. The utilization rate for the fleet of 575 rigs in Canada had hovered around 10 per cent for a month. The 104 rigs in the field this week is still a far cry from the 200 rigs running at this time last year or the 273 in the record drilling year in 1997. Geddes, who is also chief operating officer at Ensign Drilling Inc., said there is no comparison to the problems of a wet spring and the problems created by low commodity prices. "The weather just delayed the work, it hasn't stopped it," he said. The industry calculates each rig employs 25 people directly and another 50 in all the related industries. Peter Linder, analyst at CIBC Wood Gundy, said costs for oilfield services will likely remain low until fall, which will help producers but slow down the recovery for service companies. "The industry is starting to feel confident as prices hold," Linder said, citing the outlook for robust natural gas prices and healthy oil prices. The renewed sense of optimism prompted the drillers association on Wednesday to boost its forecast for the wells expected to be drilled this year by eight per cent to 8,400. The association cites improved economics of heavy oil production for the revised forecast. Earlier this month, the Petroleum Services Association of Canada predicted more than 8,900 wells will be drilled in Western Canada this year. In the past decade, an average has been 10,000 wells a year. calgaryherald.com