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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: Craig C who wrote (6889)	10/14/1999 12:18:00 PM
From: SofaSpud	of 24939

Quite a few juniors were pretty close to the edge by the end of the first quarter. Bank lines used up, that kind of thing. If we had had another two quarters of $10 oil, Probe wouldn't be the exception, IMO. I agree with your observation that the service side has been slow to pick up. Part of it was plain bad weather. But I do think that several companies whose balance sheets got ugly have had to walk a tightrope -- use improved cash flow to clean up the balance sheet, at the expense of drilling to take advantage of higher prices. The market is, of course, extremely unforgiving -- some of the former princesses are now considered toads because they haven't grown, haven't been able to afford to grow. If we still have $20 oil in mid-2000, there will be a ton of money coming into the sector. But my guess is that we won't see U.S. buyouts from this point. Crestar, for example, was being shopped at $12, so why buy over $20? The exception might be if East Lost Hills lives up to its hype -- I would think Berkley would be taken out in a New York minute if they proved up multi TCFs. BWDIK.

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