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Nabors fears cooling drillbits



By Upstream staff 

Land rig contractor Nabors Industries said today it expects continued weakness in pricing in North American markets in the near-term.

"We won't have pricing power in the US and Canada over the short term," Gene Isenberg, the company's chief executive, told investors at the Howard Weil Energy Conference, Reuters reported.

Last week, Nabors said first-quarter earnings would fall well short of Wall Street estimates after weather disrupted its North American rig activity.

Still, Isenberg said he was "pretty optimistic" about his company's outlook as it continues the process of upgrading its fleet of rigs.

Warmer temperatures in Canada forced producers to halt operations there earlier than usual, while ice storms in Texas, Oklahoma and California reduced well-servicing rig hours, Nabors said at the time.

Oilfield services group Halliburton warned in March that its quarterly profit would lag analysts' expectations because of decreased drilling operations in North America.

A warm start to the winter in key consumption areas in North America boosted supplies of natural gas in storage and sparked fears that exploration companies would cut back on drilling in 2007.

However, Schlumberger chief executive Andrew Gould told the same conference a late cold snap in the same areas earlier this year could instead stir demand for natural gas later this year or in early 2008.

"We believe that fundamentals are in place for reinforced natural gas activity later this year or early the next," Gould said.

Gould also said that Schlumberger is seeing "fairly strong growth" across all the company's technologies and repeated his previous forecast for revenue growth in the high teens for the rest of the decade.


Monday, 02 April, 2007, 17:53 GMT  | last updated: Monday, 02 April, 2007, 17:53 GMT

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