Lower oil, gas prices hitting Canadian drilling companies

The consequences of higher costs and lower commodity prices are trickling down to Canada’s oil and natural gas service companies.

The country’s energy companies for months have been grappling with rising labor and materials costs and, more recently, have been saddled with a decline in crude oil prices. This uncertain environment likely will lead to cutbacks in drilling this winter.

Less drilling means less revenues for service firms, a sign of moderation that could depress share prices going into 2007, analysts say.
Market Watch