Offshore Logistics: Overlooked Energy Play
by Eric Singer 7/23/99
Over the past year, oil prices have been on a wild ride.
After falling to a low of roughly $10 per barrel last December, the price of crude has recovered to more than $19. Finally, at current crude oil prices, it is much more economical for oil companies to accelerate exploration and development activities.
Yet, while many oil services stocks have powered to 52-week highs, Offshore Logistics (NASDAQ:OLOG - news) has languished, closing Thursday at $11.63, down $0.38. It's also trading closer to its 52-week low of $8.50 than its high of $18.
Its prospects, though, are improving. As this becomes more and more evident, expect its share price to move to new highs.
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Bottom Line:
As oil prices continue to stabilize at higher levels, production and exploration activity will increase. While it may take a few quarters for earnings to get back on track at Offshore, the company can earn in excess of $1 per share in fiscal 2001.
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