Nabors thrives on Canadian business

Gary Park

Petroleum News Calgary correspondent

The Canadian division of Nabors Industries should contribute heavily to the drilling giant’s performance over the next 18 months, so long as activity matches its projected record levels.

Nabors’ Chairman and CEO Gene Isenberg said the Canadian unit is “virtually certain to significantly surpass its previous record results over the next few quarters and throughout 2004.”

He told a conference call the company is “enthusiastic about the multitude of incremental prospects for continued growth” in Canada, noting that a shift to greater well depths is “now statistical, it’s not anecdotal. … If it goes the way everything else goes, I think that real shallow stuff is running on a treadmill which an ever-increasing slope in view.”

Canadian activity in the third quarter climbed to 39.1 rig years from 23.4 a year earlier and reached 40.4 for the nine-month period compared with 20.6 in 2002. Well-servicing rig hours leapt to 90,233 in the third quarter and 229,393 to the end of September compared with 62,553 and 93,081 for the same periods of 2002.

Precision Drilling notched similar gains, achieving 10,848 operating days and 52 percent utilization of its drilling rig fleet, compared with 6,944 operating days and 34 percent utilization in the same quarter of 2002.

The service fleet of 239 rigs generated 110,447 operating days, up 19 percent from the same period last year.

The company said it has budgeted C$158 million to its technology services group in 2004 as it tries to market new technologies in the United States and overseas.

“The only limiting factor that I can really see, as we start to pick up momentum, is just the number of drilling tools in our capacity,” said John King, senior vice president of technology services.

Among its plans, Precision aims to launch a 6 ?-inch drilling tool in the first three months of 2004 and an 8 ? inch tool later in the year.

King said Precision has reduced operating costs by about C$600 per day over the same period of 2002.

Akita Drilling, the leading contractor in the Canadian Arctic, reported a C$7 million increase in overall third-quarter revenues to almost C$29 million, with profits climbing to C$4.16 million from C$1.86 million.

For the first nine months of 2003, Akita has drilled 1,090 wells with its 35 rigs and totaled 5,437 operating days for a 55 percent utilization rate. Over the same period of 2002 it completed 944 wells, more than 4,536 operating days and a 46 percent utilization rate.