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Bullish view of Canadian outlook
Weatherford International, the Houston-based oilfield services powerhouse, believes its Canadian operations are on the verge of a turnaround after absorbing a 19 percent drop in its rig count in the final quarter of 2007.
“It’s been a rough ride for Canada and Weatherford, the most exposed large service company in the Canadian market,” Bernard Duroc-Danner, the company’s president, chairman and chief executive officer, told a conference call.
He said Canada’s oilfields have “endured just about everything that could go bad — North America’s lowest spot gas price, an unfavorable change in the tax regime, a rising Canadian dollar, a 30 percent drop in activity and a concerted drive to lower oilfield service pricing.”
But with consistently high oil prices and gas at $7 per thousand cubic feet, the Canadian market has “stabilized and feels ready for recovery, perhaps in late 2008 or early 2009,” he said.
Thirteen heavy oil projects; 10 more by 2015 Duroc-Danner said that with 13 heavy oil projects producing 1.2 million barrels per day in Western Canada and an additional 10 more projects due to start operations by 2015 at the latest, the heavy oil segment will lead a “slow, powerful” recovery in the region.
Despite the downturn in the Canadian market last year, Weatherford said its Canadian artificial lift, well construction and wireline operations increased on a year-over-year basis.
In the United States, activity levels have been “flattish” rather than down, said Chief Financial Officer Andrew Becnel.
The company said it benefited from rig utilization rates of 75 percent in the Rocky Mountains area and 78 percent in the West Texas-Permian Basin area, while the utilization rate rose across the U.S. in December to 73 percent from 70 percent a year earlier.
Net income climbed to C$331 million in the fourth quarter from C$272 million in the same period of 2006, while earnings for the full year rose to C$1.07 billion from C$896 million.
—Gary Park
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