August 6, 2003—In a semi-annual survey of the oil and gas equipment and services industry, Standard & Poor’s equity analyst covering the industry notes that, despite the environment of high prices for oil and natural gas that has existed since last year, only in recent months have these prices led to higher U.S. drilling activity. Natural gas drillers in particular, faced with high depletion rates from existing wells, are struggling to maintain existing production levels of a product whose demand has grown sharply in recent years.
The survey, “Industry Survey on Oil & Gas: Equipment & Services,” is published twice yearly by Standard & Poor’s, a provider of independent research, indices and ratings.
“With natural gas well depletion rates of almost 30% in most areas of the nation, it has been a major challenge to maintain, let alone increase, U.S. natural gas production,” says John Kartsonas, Oil & Gas Equipment & Services Analyst, Standard & Poor’s Equity Research Services, who authored the survey. “Standard & Poor’s expects land drilling activity to increase throughout 2003, achieving utilization rates of nearly 87%. We also foresee land-drilling margins improving during the second half of the year. But so-called deep shelf production, from reservoirs deeper than 15,000 feet in the Gulf of Mexico’s Outer Continental Shelf, may be one of the most attractive sources of additional natural gas supply,” concludes Kartsonas.
‘Industry Survey for the Oil & Gas: Equipment & Services Industry’ looks at the issues affecting the main segments of the drilling and oilfield services industry. These include the boom-bust-boom energy cycle, field depletion rates, industry consolidation, and challenges in replacing experienced industry workers who were laid off during the last major downturn in 1998.
The survey also examines key industry statistics such as oil and natural gas prices, economic growth and demand, OPEC and non-OPEC production, rig counts and utilization rates, dayrates and daily margins, new rig construction, and exploration and production spending.
For more information, or to purchase the survey, contact Standard & Poor at 800/221-5277. The survey is also available for download online.
