According to 1Q 2010 surveys by The Land Rig Newsletter’s Day Rate Report
, drillers are generally optimistic over market conditions in oil basins. However, drillers reported that lower natural gas prices have begun to dampen prospects for more drilling in the near term, and many operators are pessimistic over the low gas price as well. In any case, market conditions in the industry have improved since the same time last year when drillers in the 1Q 2009 survey reported prospects for work were very low for both oil and gas drilling. At that time, there were no wait lists, no bid inquiries for future work, and work backlogs were at a standstill. In the current 1Q 2010 survey, however, market conditions are showing an improvement since the 4Q 2009 survey. Observing the four surveys completed and published in the Day Rate Report
over the last year, all indicators point to “bottom” in late 2Q 2009 or early 3Q 2009 and improvement in 4Q 2009.