Schlumberger Ltd. (SLB) Chief Executive Andrew Gould said Friday that natural gas drilling activity in North America has reached some stability after the precipitous drop in recent quarters, but a rebound isn't expected soon.

The company assumes that there will be "no major increase in North American rig count until 2010," Gould said during a conference call with analysts. That means that "service prices will remain depressed," he said.

Gould also said that the recent increase in oil prices doesn't guarantee that the company's clients - oil and gas producers - will increase their spending, as oil markets are still very uncertain. "There's too much volatility in the oil price at the moment to sanction much increase in spending," he said.

Gould, who heads the largest oilfield services company in the world, said he was concerned about the effect of oil price volatility in the cash flow of oil and gas companies. "The thing that worries me more than anything else is our customers' cash flows," he said. "Even our very largest customers are having to borrow" to sustain their spending, he said.

If oil prices do not see a "fairly substantial improvement" at the end of the year, the company's customers are at risk of delaying projects, he said. However, if prices remain high through 2009, he said, it's likely that Schlumberger's customers will "gain some confidence" to build up activity sometime in 2010.

-By Angel Gonzalez, Dow Jones Newswires; 713-547-9214; angel.gonzalez@dowjones.com

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