Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Edward Marshall - Sidoti & Company.
Edward Marshall - Sidoti & Co
My first question has to do with the months of supply and the energy channel. Is there any way for you to quantify, in particular in the oil and gas, as to what the months of supply and how long it will take to kind of work through.
Mike Shor
Ed, this is Mike Shor, good morning. A couple of things; number one, we are seeing that rigs or the count of rigs are off the bottom with oil prices recovering. Even as more directional rigs come online it will be several quarters before the growth resumes. We’ve seen some significant over buying there for inventory in the supply chain, which will lead to at least a couple of quarters before we see something coming back.
Edward Marshall - Sidoti & Co
Okay, and then from an inventory level, as you are holding on the balance sheet here, do you kind of expect that to remain somewhat stable for the remainder of the year?
Mike Shor
Relatively stable; we’d expect to end the year at about the same position that we started the year.
Operator
Your next question comes from the line of Gautam Khanna - Cowen & Co.
Gautam Khanna - Cowen & Co
One of your customers was acquired by Precision Castparts recently, and there’s been talk about potentially enforcing some of the nickel you provide. How long do your contracts extend with Carlton Forge and what is your exposure there?
Mike Shor
Gautam, it’s Mike Shor, a couple of points related to that. On the PCC acquisition of Carlton, we are comfortable about the commitments we have from Carlton for the next year or two. Beyond that timeframe, there is still a number of products that we supply to Carlton that we believe have very high value to them, and that we would expect for them to purchase from us.
Really the summary is, we believe that we can more than offset the loss of the Carlton business as it occurs. A couple of other points that I think are worthwhile; we have continued to aggressively pursue share gain opportunities beyond Carlton, both short and long term in our aerospace business, and we have been successful in gaining share that will result in some near term growth, and beyond that, we are looking at products new to Carpenter and some long term share initiatives also.
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