Drillers' Confidence Remains Both Stalwart and Realistic
While the term "normal" remains difficult to gauge precisely these days, it's something that many people look forward to going back to -- even if they can't explain exactly what they mean by it right now. The first lesson here is don't feel like you're the only one.
When we canvassed the industry at the beginning of the year, there was a lingering numbness from the economic and world events of 2001. Most years when we ask drilling contractors about their prospects for the coming year, answers come quick and resolute; there usually isn't a lot of hemming and hawing. For better or worse, contractors normally would have a good handle on their situation.
This year was different. While certainly confident in their own abilities, and working with an improving economic picture, drilling contractors often tempered their enthusiasm for 2002 with the disclaimer, "But you just don't know." It wasn't skepticism; it was lesson number two: we don't take things for granted as much as we used to. We take a harder, more cautious look at things now.
Lesson two was reinforced for us by economic indicator trends of the first part of the year. President Bush got a lot of grief for his tax cuts and economic stimulus packages. Now only the far left denies that these steps laid the foundation for the ongoing recovery. The first couple months of the year were gangbusters economy-wise. The tax cuts combined with mortgage refinancings, warmer-than-usual winter weather, an early Easter and lower energy prices all at the same time. That kind of surge can't be maintained forever and some of the indicators are fading back (or even reversing -- been to the gas station lately?).
So, we had a nice little run there. But the strength of it came from consumer spending and government outlays -- temporary influences. Longer-term help will arrive with the strengthening of the corporate sector, and that takes a little longer to kick in when compared to the consumer side. In the face of much ridicule, the Bush Administration took care of the first part quite nicely; this should provide some good momentum for the next steps.
Remember being scheduled six weeks out? That used to be normal for lots of drilling contractors. Not anymore. But to their credit, drillers play the hand they're dealt and don't whine or panic. While the schedule may only go out a week or 10 days right now, contractors say they're staying busy and remain determinedly confident. Right now the rigs might be a little cleaner than usual, but enjoy that while it lasts. If the rest of the country can follow the spirit of the drilling contractors I've spoken with, we'll get back to normal, pass it and keep going from there. That's lesson number three: perseverance -- it's important to your balance sheet. And it's a reflection of your personal and professional pride -- something there is no shortage of in the drilling industry.