* North American spending seen rising faster than expected
* Increase in expected oil price behind fatter budgets
* Majority of firms see double-digit growth in 2012
* Baker Hughes shares up 1.6 pct, Halliburton up 1.2 pct
(Adds analyst on Halliburton stock, share prices, byline)
By Braden Reddall
SAN FRANCISCO, June 7 Global spending on oil
and gas exploration and production may grow 14 percent in 2011,
faster than a previous forecast from a survey that found
billions of dollars more flowing for North American drillers.
The forecast from Dahlman Rose & Co analyst James Crandell,
who had previously expected an 11 percent increase, bodes
particularly well for the profits at U.S.-focused oilfield
service companies such as Halliburton Co (HAL.N) and Baker
Hughes Inc (BHI.N).
Exploration and production spending is expected to grow 22
percent to $122 billion in the United States and rise 16
percent to $42 billion in Canada in 2011, according to the
semiannual survey released on Tuesday.
That compares with growth forecasts of 8 percent in the
United States and 5 percent in Canada in Crandell's survey from
December, when he was still at Barclays Capital.
The 445 oil companies participating in the survey based
their estimates on assumed average U.S. prices of $87.31 per
barrel for oil CLc1 in 2011, up $10 from expectations in the
last survey. They assumed an average price of $4.53 per
million cubic feet for natural gas.
Some 56 percent of companies expect higher exploration and
production spending next year. Of those, nearly two-thirds see
it growing by more than 10 percent, and the rest see it up more
than 20 percent.
"The results of our survey support our positive view
towards investing in oil service stocks," Dahlman Rose said in
a note announcing the results of the survey, which Crandell
started in 1982 and aims to include every meaningful E&P
Crandell moved to Dahlman Rose in February. [ID:nN1688786]
International E&P spending in 2011 is estimated to grow 12
percent to $370 billion, little changed from the estimate six
months ago, according to the survey.
As of December, worldwide E&P spending had already been
expected to hit its highest level in a quarter of a century.
Shares of Baker Hughes were up 1.6 percent in afternoon
trading on Tuesday, while Halliburton was up 1.2 percent.
Sector leader Schlumberger Ltd (SLB.N), which has far more
exposure to international markets, was 0.7 percent higher.
Halliburton shares took a big hit on Monday after the U.S.
Supreme Court ruled that shareholders could band together to
sue the company over its disclosure of certain asbestos-related
liabilities in the past. [ID:nN06265093]
Canaccord Genuity analyst Scott Burk said Halliburton's
share price drop relative to rivals on Monday implied an
expected liability of about $600 million.
"A liability that large seems excessive, in our view, given
that the lawsuit is focused on the timing of disclosure of
liability, and not on asbestos-related illnesses," Burk wrote
in a research note to clients.
(Reporting by Braden Reddall; editing by John Wallace)