ENERGY Downturn time for drill rig operators

Jul 01, 2007 | 07:04 AM |

If import figures are any indication, the oil country tubular goods (OCTG) market in Canada might be slowing.

Imports accounted for about 40 percent of supply in Canada over the past two years but only 20 percent in the first quarter of 2007, an early indication that the market is softening, said Guy Cocquyt, director of investor relations and market research at Flint Energy Services Ltd., Calgary, Alberta.

Drilling activity and OCTG demand are driven primarily by energy prices, which in turn determine energy and production companies' budgets, he said. "These are the two leading indicators we look at for forecasting, usually on a 12-month horizon." Well permits, drill rig activity, rig releases and well depths are near-term indicators of demand and how it affects current OCTG demand.....

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