Possible uptick in jackup demand ahead, analyst says

The global market for jackup drilling rigs remains uncertain but there is optimism for stronger demand regionally, especially in the Gulf of Mexico, according to a research note today by Pritchard Capital Partners.

Offshore staff

HOUSTON – The global market for jackup drilling rigs remains uncertain but there is optimism for stronger demand regionally, especially in the Gulf of Mexico, according to a research note today by Pritchard Capital Partners.

Sentiment about the North Sea market remains bleak but the rig industry is showing signs of optimism about West Africa, the Middle East, and the GoM, Pritchard says.

“Low natural gas prices and an unfavorable credit market on the onset of hurricane season will likely keep the current active GoM rig count near 17 rigs, or approximately 44% utilization and for the first time in history there are now more than twice as many jackup rigs drilling offshore Mexico than in the GoM,” the note says.

Lower rig supply and the belief that natural gas prices will firm in early 2010, along with improved credit conditions, leads Pritchard to expect the GoM market will bottom out in September and improve heading into 2010 and beyond.

7/24/09

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