When Drilling Becomes Contagious
April 06 2010 - 8:22AM
Marketwired
www.rothmanresearch.com -- The last five trading days have seen the
bulls' support for crude oil grow strong and eager. Backed by
positive economic data in the U.S., oil prices have surged by more
than 8% in recent days. More cheering news swarming the oil
industry is the sustained growth in the oil services and drilling
cycle. Last week the number of active rotary rigs drilling for oil
in the US was on the rise, with Texas taking the lead with a
distinct boost as compared to other key producing states. One of
the main drivers to increased drilling activities is the trend of
pricing enhancement, and
Patterson-UTI Energy
Inc. (NASDAQ: PTEN), in its last earnings conference call,
commented on this positive prospect even if the company accounted a
net loss of $0.12 per share in the Q4 2009. Patterson projected
that its rig count for Q1 2010 would average 140 rigs, and if oil
prices continue to show signs of upside, the company might start to
see healthier returns with its drilling and pressure pumping
segment.
*Direct & free downloadable report on Patterson-UTI Energy Inc. is available by signing up
now at
http://www.rothmanresearch.com/article/pten/23389/Apr-06-2010.html
High prices has always bode well with drilling and exploration
companies as on a financial level they justify the drilling for new
wells. "With prices moving upwards and the market trend favoring
oil, it is quite clear right now that the bulls are in control, and
as long as they stay put, the oil drilling industry will be the
great winners... we will see a lot more drilling specially from
companies, like Compton Petroleum Corporation
(NYSE: CMZ), which have had a difficult revenue year in 2009 due to
low commodity prices," commented Jack Benassi of
www.rothmanresearch.com, "however, it should be noted that the
price of oil as it stands is not following the natural trend of
demand and supply... There is sufficient supply in the market right
now and demand of this commodity has not really increased."
*Complimentary downloadable research on Compton
Petroleum Corporation is accessible upon registration at
http://www.rothmanresearch.com/article/cmz/23390/Apr-06-2010.html
However, the proper drilling contagion is about to go wild with
the Obama administration granting limited access to offshore
regions including the Virginia Coast which was
prohibited-drilling-territory for the last 20 years. With emerging
economies thirst for oil is ever-growing, it became imperative for
the U.S. government to open new exploration zones even if the
negative externalities could present challenges in both short and
long terms.
*www.rothmanresearch.com is a source for
investors seeking free information on the oil & gas industry;
investors are encouraged to sign up for free at
http://www.rothmanresearch.com/index.php?id=6&name=Register.
Considering that the oil and gas industry is probably one of the
most volatile, adding to this that we are not going to see a change
in the trend for fossil fuel use by industrial nations and
sprinkling the recent offshore drilling developments in the U.S.,
it would be a fair assessment to say that 2010 could see drilling
activities in the oil industry surge significantly. Read our
reports upon free registration at
http://www.rothmanresearch.com/index.php?id=6&name=Register to
have an insight.
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