November 3, 2009 / 4:50 PM / 9 years ago

WRAPUP 1-Oilfield services cos beat market; demand pickup seen

* Cameron, Rowan beat estimates

* Cameron Q3 orders exceed revenue * Rowan says demand for jackups, land rigs bottomed in Q3

* Parker Drilling sees slow improvement in overall outlook

BANGALORE, Nov 3 (Reuters) - Oilfield services providers Cameron International Corp CAM.N and Rowan Companies Inc (RDC.N) reported better-than-expected quarterly profits, helped by an uptick in drilling activity, and said the outlook for the sector is improving with a recovery in commodity prices.

Oilfield service companies have seen revenue slump in the past year as their oil and gas producing customers have cut spending on new projects. But a recent rebound in crude oil prices and hopes that an economic rebound will boost natural gas demand have prompted some companies to develop new wells.

Cameron, which raised its full-year forecast for the second time in three months on strong orders for its oilfield services, said orders received during the quarter exceeded revenue for the first time since the third quarter of 2008. [ID:nN02453485].

Smaller rival Rowan, which beat analysts’ mean profit estimates by 2 cents in the quarter, also said demand for its rigs and mining equipments has been improving. [ID:nBNG516866]

“While excess rig supply has, and will likely continue to put pressure on day rates, we believe global demand for jackups and land rigs bottomed during the third quarter,” Rowan Chief Executive Matt Ralls said, adding there is increased contracting activity in the North American land and jackup drilling markets.

Unit Corp (UNT.N), which provides drilling services and is also involved in oil and gas exploration, said it believes initial signs of increased demand for drilling activity by exploration and production companies have materialized. [ID:nBNG486811]

However, Parker Drilling Co PKD.N forecast a slow improvement in overall outlook, and warned that dayrates remain under pressure, tool rental rates are heavily discounted, and contract commitments are slow to develop. [ID:nBNG404832].

Allis-Chalmers Energy Inc’s ALY.N Chief Executive Micki Hidayatallah said there has been a slight increase in utilization in the company’s oilfield services segment, although the domestic pricing environment remains very competitive. [ID:nBNG484851]

“Our drilling and completion segment, with operations in Argentina, Brazil and Bolivia, has shown an improvement in day rates and revenues,” Hidayatallah added.

Shares of Cameron were trading flat at $37.28, while Rowan shares were up more than a percent at $23.74.

Allis Chalmers shares fell 10 percent and shares of Unit Corp and Parker Drilling were down about 3 percent in morning trade on the New York Stock Exchange. (Reporting by Hezron Selvi and Thyagaraju Adinarayan in Bangalore, Matt Daily in New York; Editing by Pradeep Kurup)

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