Allis-Chalmers sees Gustav hurting Gulf of Mexico ops

BANGALORE Aug 28 (Reuters) - Oil services company Allis-Chalmers Energy Inc ALY.N expects tropical storm Gustav to hurt earnings from its Gulf of Mexico operations, its chief executive said.

"I don't know how much and I can't predict whether land operations will be strong enough to absorb that," Chief Executive Munawar (Micki) Hidayatallah told Reuters by phone.

The company, which is aiming for a 5 percent to 10 percent quarter-over-quarter growth in its rental services segment, said earnings in the segment will now be subject to the effect of the hurricane.

Allis-Chalmers provides services and equipment to oil and natural gas exploration and production companies in the United States, offshore in the Gulf of Mexico, and globally mostly in Argentina and Mexico.

Energy companies began evacuating offshore platforms on Wednesday and began shutting production on Thursday ahead of the storm which is expected to enter the Gulf on Sunday as a major hurricane.

Weather forecasters said Gustav will strengthen to catastrophic Category 5 hurricane before making landfall early next week.

Business in the northern fields of the Gulf of Mexico will be affected, said Hidayatallah, adding that some of its directional drilling tools that are offshore have been put on standby.

The company is also in talks with its customers in the area to negotiate rental values of its drill pipes.

"Our policy really is that for an act of God, we really expect, because our pipe is there, to get the full rental value. But these are very good customers of ours and obviously they are not operating during this period of evacuation so we'll try and work something out," Hidayatallah said.

Evacuations at the company's operations have not started yet, Hidayatallah said.

Shares of the Houston, Texas-based company were down 2 percent at $14.33 in after-hours trading. The shares closed at $14.56 in regular trading Thursday on the New York Stock Exchange. (Editing by Gopakumar Warrier)