Service companies as well as E&P firms are enjoying the drilling boom in western Canada, according to a new Canadian Association of Drilling Contractors forecast, which expects 19,500 wells will be drilled this year, a new record. The type of drilling has changed, however. Conventional Canadian oil drilling activity has declined about 21% since 1997 as operators focus more on gas, heavy oils and oil sands, and offshore eastern Canada. Too, most of the majors and large independents at the recent Canadian Association of Petroleum Producers (CAPP) meeting mentioned that they plan to kick off new coalbed-methane pilot projects in the next few months, taking a page from their U.S. cousins who have so successfully plumbed this resource in the U.S. Rockies. That's why service companies are shifting their emphasis in product offerings, presenters told investors at the recent oil-services investment symposium held by the Petroleum Services Association of Canada (PSAC). "We've launched new initiatives such as selling more seamless pipe used in gas wells, selling a new line of compressors for low-performing gas wells, and selling a proprietary, progressive cavity pump for heavy oil production," noted John Gilbank, chairman and chief executive officer of C.E. Franklin Ltd., Canada's largest oil-supply store chain. The company, with 40 service centers and15 pipeyards across Canada, provides products for drilling, gas gathering and gas processing. Within the last two years, it implemented the industry's first online catalog (now listing some 42,000 products) and made seven acquisitions. Last year as the number of Canadian wells drilled surged 69%, the company's sales rose 52% and it returned to profitability. "But, we urge investors to look beyond the rig-count numbers and evaluate the different business models that are out there to see which one makes sense," says Gilbank. "Our biggest opportunity today is in tubulars-pipe, valves and fittings-which we see as a C$4.5-billion market."