Wanted: A few (lot of) good people ///
Borrowed words from a favorite Marine Corps slogan help define an energy industry in a people crisis. Contrary to many industry players’ opinions, the anxiously awaited end of the cycle did not occur during 2006. Nor is it expected in 2007 or 2008. Indeed, much of the offshore drilling capacity is committed through 2008-2009 for nearly all classes of assets. A similar forecast exists for land rigs, which tend to operate on shorter-term contracts.
No question, we’ve seen jackup day rates soften in the US Gulf of Mexico, due to hurricane effects, lower natural gas prices (which bottomed somewhere near the $4/Mcf range), and short-term drilling projects taken by jackups waiting to mobilize from the Gulf to foreign destinations. Cap that with many operators consuming their 2006 budgets early and then waiting on the sidelines until 2007, which already has the makings of a very busy drilling year.
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