The mood at the recent Society of Exploration Geophysicists annual meeting in Houston was restrained. Attendance was strong, totaling more than 11,000 registrants and close to 400 vendors, but optimism was in short supply. Clearly, companies in the geophysical sector are not yet enjoying the fruits of the higher crude prices that have prevailed since last spring. World Geophysical News reports that the U.S. crew count stood at just 63 on Dec. 1, and the world count at 241. Marshall Adkins, analyst with investment banking firm Raymond James, notes that many seismic acquisition and equipment companies are facing depressed activity levels for another two to three quarters. "Historically, seismic activity has always been a precursor to drilling activity. E&P companies would first invest in seismic data before they committed exploration and development dollars. During the last five years, however, that historical relationship has changed dramatically," he says. The culprits are the geophysical vendors themselves, Adkins says. The vast libraries of speculative seismic data that they have amassed have dampened the demand for proprietary data. Seismic activity today is driven by expectations for future data purchases, capital availability and the desire to keep seismic equipment fully utilized. Consequently, seismic activity now lags drilling activity by as much as a year. Vendors selling software and hardware products at the show were also glum. Their customers in the operating sector have also been reluctant to increase spending, citing both restricted budgets and concerns about the possible effects of Y2K computer problems. -Peggy Williams

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