Newspaper article THE JOURNAL RECORD

Survey: Oil Industry Slump Likely to Mean `99 among Worst

Newspaper article THE JOURNAL RECORD

Survey: Oil Industry Slump Likely to Mean `99 among Worst

Article excerpt

HOUSTON -- Any improvement in the nation's sagging oil and gas industry probably won't come soon enough to prevent 1999 from being among the industry's worst years, according to a trade magazine survey.

In World Oil magazine's annual letter to oil industry executives, publisher Lanie Finlayson said survey data foreshadows an 18 percent decrease in oil and gas drilling from 1998's anemic levels and continued poor rig counts.

Houston-based Baker Hughes, which has monitored rig counts since 1944, reported Friday a record low 562 active U.S. rigs this week as weak prices continue to stifle exploration and production. "It's difficult to find anything positive to say about drilling activity, especially in the U.S., after the devastation that occurred during 1998," said Finlayson, whose magazine is owned by Gulf Publishing, which has followed the industry since 1916. Based on its survey of 20 major drillers and 235 independents, World Oil forecasts 21,125 wells will be drilled in the United States this year, down from 25,639 in 1998. In Texas, the magazine predicts a 23 percent cutback in drilling from 8,846 rigs last year to 6,797 in 1999. California should fare even worse, with a projected drop of 44 percent, from about 2,400 rigs in 1998 to 1,350 this year. The news is better internationally, where production costs are cheaper. Total drilling activity is expected to dip just 4 percent, though the survey bodes ill for drilling prospects in the North Sea, South America and several other regions. …

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