Gas Drillers On A High Following A Surge In Commodity Price

A rally in the natural gas prices this year has had investors expecting more drilling, especially in the Gulf of Mexico, and provided big gains to some the smallest US companies in the field, including Patterson UTI Energy and Rowan.

Patterson and Rowan specialize in natural gas drilling and, unlike Transocean, the biggest company in the group, they concentrate their business in North America. Investors are assuming that domestic drillers will get more contracts because of growing demand and also the thirty percent rally in prices this year.

Shares of Snyder, the Texas based Patterson, seventh-biggest out of the ten drillers with a market value of more than a billion dollars, are up by thirty five percent this year. Rowan, based in Houston and ninth on the list, is up by thirty four percent. The companies make money by selling their services to exploration and production companies.

“The driver is shallow water drilling in the Gulf of Mexico, specifically for natural gas,” said James Wicklund, an analyst with Banc of America Securities in Houston. “The shallow waters of the Gulf of Mexico are more gas prone. High crude oil prices don't hurt either.”