Canadian activity, which has been a precursor to higher U.S. activity, concrete signs of which are rapidly emerging. 

Going forward, we firmly believe that significantly higher levels of land drilling are necessary if the U.S. is to develop a sufficient supply of natural gas, which is the fuel of choice to drive economic growth because of its environmental desirability. While there are a number of potential fuel alternatives for natu- ral gas and petroleum, the regulatory, economic and technical challenges associated with their development remain formidable. Indeed, economic competition from these energy sources on a scale large enough to challenge the preeminence of natural gas and dampen the need for continued and expanding worldwide exploration and production efforts is at least a decade away. 

In the interim, we expect to see higher average gas prices than we have witnessed in recent years. These will serve to reduce the components of gas demand that are most flexible and sensitive to price, while stimulating supply by improving the economic incentives to drill. While North America is generally thought to be a mature basin, a sustained higher price environ- ment makes drilling in more remote areas and the pursuit of deeper reservoirs more viable, and justifies the increased use of rig-intensive technologies to improve the exploitation of existing 

