US oil and gas exploration and production companies have increased forecasts for the remainder of 2009, citing increasing oil prices and falling oilfield service costs as the reason why, according to a Reuters report.

Companies such as Bill Barret and Denbury Resources have projected improved results for the second half of 2009 as crude oil increased from $43 a barrel a quarter ago to just less than $60.

Lower service costs have also helped companies such as Exco and Berry Petroleum post better-than-expected quarterly results.

Service costs are expected to fall further by another 5% to 10% and may not pick up with increased drilling activity, Stifel Nicolaus analyst Amir Arif told Reuters.

BMO Capital Markets analyst Jim Byrne, however, said that he believed a further fall in service costs would reduce their impact on the bottom lines of the companies.