OTC: UK survey: "don't panic"

A survey on the outlook for the offshore energy business conducted by Subsea UK and Scottish Enterprise says it will be tough for some parts of the business but others expect a rebound by year’s end.
The study surveyed drilling contractors, equipment manufacturers, offshore construction firms and integrated oilfield services firms, asking them to predict how their earnings per share would be impacted moving forward.
Surprisingly, drilling contractors are expecting a minimal impact on EPS, down just .6 percent for the first quarter and then rising 3.6 percent overall for the year. Oilfield services firms are seeing a small drop this quarter too, by 3 percent, but a 14 percent drop for the year.
Equipment manufacturers expect a steep drop in EPS in the first quarter, by 22.2 percent, but a 3.5 percent improvement for the year is expected. The offshore construction business has the most pessimistic view, with Q1 EPS expected down 34 percent and a 15.6 percent drop for the year.
“Depending on where you are sitting in the market there can be a lot of pain,” said Alistair Birnie of Subsea UK (sort of like the American Petroleum Institute).
The top-tier firms that are larger and working on the biggest deepwater projects are in the best position (no surprise there) Birnie said, and are starting to trawl for work that usually went to the smaller second-tier firms.
Brian Nixon of Scottish Enterprise noted that some offshore construction firms are diversifying, such as firms getting work in the offshore wind business in Europe. The firms are able to get much of the project costs paid up front, which actually makes the financing costs for the whole project less expensive.

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