Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: George Kirlin who wrote (9297)	1/22/1998 6:03:00 PM
From: DNaber	Read Replies (1) of 95453

To All: 1720 EST Conversation w/ UTI CFO. After getting whacked today, I needed some reassurance....called UTI's number expecting to hear from a 20 yr old PR secretary..was actually transferred to Blake Dupree, their CFO. Said they have currently 65 rigs running...only slightly lower than 70 one time peak which occurred for a very short period in 4th quarter...his regional managers see no significant drop off in demand...in discussions with customers, they've indicated no changes in previously set 1998 drilling plans.... also pointed out that natural gas drilling accounts for 80-85% of their revenue (as per most US landdrillers) and comes from the S.Texas, E.Texas, OK and Appalachian regions....only sector at some risk due to a further drop in oil prices is W.Texas, but even there, they feel somewhat insulated due to the fact that major customers are Arco and Pioneer-two large firms who also do not see curtailment in drilling...I asked him why market can't differentiate between natural gas plays and oil...he said he didn't know..that traditionally investor sentiment is based on oil prices..and crude market could remain volatile for a couple of months..while OPEC members jockey for position (edit:read Venezuela vs Saudi-Who will blink first?) ...I then asked him what he thought about UTI's valuation when stock was at 48 in late October. He said that he felt then that the market was pricing UTI at 1999 valuations (edit 12-18 months from now!)..but couldn't very well put out a press release saying that UTI was overvalued. Hope this helps some..although it doesn't take away today's licking, it helps to look at things going out abit. Dave

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