Seismic Firms See Business Rise With Search For Oil, Gas 

HOUSTON -- With permits in hand, land surveys completed, and hundreds of
20-foot holes dug over several square miles of a Rocky Mountain ranch, a
crew of 50 to 80 workers is nearly ready for the series of dynamite
blasts that will allow it to create an image of the earth below.

In an instant, the blast sends seismic waves below ground, while
thousands of sensors about the size of large gum balls, spread for miles
across the ranch, record the subsurface activity. The process can be
repeated more than 100 times a day, for a week or even months. The idea
is to determine how the waves react with the structures below and spot
possible structural traps that could contain crude oil and natural gas.

"This stuff gets in your blood," said Stephen Jumper, chief executive of
Midland, Texas-based Dawson Geophysical Co., which does such work for
oil companies across the continental U.S. "It's incredibly exciting." 
 

The ongoing global rush to explore for new sources of hydrocarbons,
fueled by higher prices, has contributed to hectic activity at companies
like Dawson Geophysical, Schlumberger Ltd. and Petroleum Geo-Services
ASA, all of which perform high-tech seismic surveys for oil companies.
Finding and gaining access to new reservoirs is an increasingly
difficult task, taking oil companies into deeper waters and rugged, more
intricate terrain.

"The age of easy oil is over," Schlumberger Chairman and Chief Executive
Andrew Gould said at a recent energy conference in New Orleans.

Such scenarios have created lucrative opportunities for Schlumberger,
whose fourth quarter income soared 71 percent largely because of heavy
exploration activity worldwide and better-than-expected results at its
seismic arm. Its 2006 sales were $19.23 billion, up 34 percent from
2005.

The company says advancements in its seismic technology allow it to
provide more detailed images in a shorter period, which in turn allows
oil companies to develop more difficult, and sometimes smaller,
reservoirs.

Demand for seismic services has created a record $1.1 billion backlog at
WesternGeco, Schlumberger's seismic division, one of the world's
largest. "We see no slackening in activity before 2010," unless the
economy sours, Gould said.

Exxon Mobil Corp., the world's largest publicly traded oil company, said
last month it will invest in more than 20 new global projects in the
next three years and that its capital spending would be about $20
billion a year through the end of the decade. The company's capital
spending tab in 2006 was nearly $20 billion, up $2.2 billion from 2005.

Chevron Corp. has said it would boost its capital spending to nearly $20
billion this year, a 20 percent increase from 2006, as it explores more
aggressively.

"Some of these wells can cost $50 million, $100 million in the
deep-water Gulf of Mexico, so you want to get it right," said Byron
Pope, an analyst with Pickering Energy Partners. "You need a reasonably
defined image so you can pinpoint exactly where you want to drill."

Other seismic providers are profiting too, including:
Norway-based Petroleum Geo-Services, which had its best year ever in
2006, when revenue rose 47 percent from 2005 to $1.3 billion.
Houston-based Input/Output Inc., whose 2006 revenue rose 39 percent to
$503.6 million from $362.7 the year before. Net income was $27 million
vs. $17 million a year earlier. Its shares have been trading around $14
a share, near their 52-week high.
Dawson Geophysical, which said in February its fiscal first-quarter
earnings more than doubled on a 51 percent increase in revenue. Sales
for fiscal 2006, reported in November, were a record $168.6 million, a
44 percent increase from the previous year.

Jumper said a reflection of demand for Dawson's services is its
employment, which has risen from roughly 300 to 1,200 in the past five
years. Jumper said business has remained robust to start 2007, lifted
primarily by the search for natural gas.

In particular, Jumper said, better technology has opened areas for
exploration in places like West Texas that previously, because of
complicated formations, were not always conducive to seismic searches.

"We're able to see things we haven't seen before," said Jumper, who
compared the advancements in his industry to those in television, where
high-definition TV has ushered in much sharper images.

What's more, Jumper and others point to an emerging trend when the
exploration boom slows: the use of seismic surveys on the production
side, to help companies monitor reservoirs and possibly increase
production.

OYO Geospace Corp., a Houston company that makes recording equipment and
other instruments for land and offshore seismic surveys, said 57 percent
of its revenue last year came from sales related to exploration, but it
sees a lucrative opportunity on the production end.

The company has developed technology that allows producers, through
sensors, waves and other tools, to monitor a reservoir's temperature,
pressure and fluid movement. OYO Geospace CEO Gary Owens said the
information can help oil companies enhance production from a particular
field and increase their return on investment.

Last year, when the firm's revenue grew 42 percent to $103.7 million,
reservoir monitoring sales accounted for 22 percent of its business,
Owens said. BP PLC is one of its few customers for now, but Owens said
he expects demand to grow dramatically.

"If you can get 2, 3, 5 percent more production out of a project, that's
big money," he said. "After all, you've already paid for the rig, the
pipeline, the other equipment. Maybe the best place to find oil is where
you've already got it."

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