Participants at the annual International Association of Drilling Contractors (IADC) land-driller conference couldn't have asked for better predictions from Wall Street oil-service analysts. In 2003, the Philadelphia Oil Service Index (OSX) could hit record peaks, dayrates might reach replacement rates, and some drilling contractors could see their stock's price double, analysts said. "Don't lay off any more field hands," said Robert Ford of Sanders Morris Harris. "That's the bottom line." Marshall Adkins of Raymond James & Associates hit upon a familiar theme-decline rates-when assessing the future of natural gas prices. He estimates production will fall 1.5% per quarter this year, a decline rate never before seen by North American drillers. "Most people don't really realize this is a finite commodity," Adkins said. He believes that in mid-2003, we could see full rig-fleet utilization, and during the next nine months, the OSX could hit $150 or $160, beating its previous peak of $144 in September 2000. During the next nine to 12 months, Adkins believes there "could be some doubles" in drilling-contractor stocks. His gas-price forecast is $3.50 per thousand cubic feet (Mcf) for 2002, and he believes the market could see $4 per Mcf by May. Ford also expects a record high OSX in 2003, but his focus is on oil. "Crude's driving the train" for drilling stocks in the near term, he said. The fundamentals suggest oil prices should be $23 to $25 a barrel, with premiums on top of that for the Iraqi embargo and Venezuelan labor strikes. If the economy continues to strengthen, and OPEC holds its resolve, the market could see $28 oil by the end of the year on fundamentals alone, Adkins suggested. -Jodi Wetuski