Strictly: Drilling and oil-field services Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: CommanderCricket who wrote (49957)	8/27/1999 10:59:00 AM
From: SliderOnTheBlack	Read Replies (2) of 95453

Big Oil's view on Cap Ex Spending... good & bad news... BP's Browne is the ''posterchild'' Big Oil CEO for the Street... this commentary is what the Street wants & what they will reward. Their is still TREMENDOUS pressure on the Oil Majors & large Independants to NOT increase Cap Ex spending from present levels for just the reasons that Browne mentions below... That damn ''Sustainability'' issue will just not go away. Both the Street analysts & many of the Big Oil CEO's simply do not trust OPEC - per Browne's comments here - they not only have no confidence in OPEC - but are actually budgeting for and planning to see much, much lower commodity prices going forward. While some of this may be the very savy ''talking down of expectations'' - it has to be a potential portent of some of the driller & service stocks perhaps not seeing the type of increases in activity in the first 1/2 of 2000 that many expect. For just that very reason - why ''bet'' on what Big Oil does Cap Ex spendingwise ? - play the ''only'' upside to a postive upside surprise in commodity prices - the E&P companies themselves. Especially the undervalued ones and even taking the entire issue a step further; play the domestic US Nat Gas pure plays - entirelly eliminating the OPEC factor... BP's Browne calling present prices - ''speculation'' and he is setting his Cap Ex spending based upon $11-$17 Brent... not good news for driller & service stocks looking forward. This is the reason I say - look for that 150 GOM rig count AND storage below 320 M boe - which we are below presently... 1/2 of the puzzle is now in place - the piece that supports present commodity prices - but the piece that supports upside earnings for the OSX is not as yet even close... Untill this changes - this clearly remains an E&P game (instead of driller/service stocks) imho... From Bloomberg today: <<BP Amoco, Europe's second-biggest oil company, is planning for Brent prices between $11 and $17 a barrel for the next few years, saying this year's surge resulted from speculation OPEC will stick to its word. ''The market is pricing expectations,'' BP Amoco Chief Executive John Browne said earlier this month. Oil ''stocks are coming down, but have not yet reached normal levels. It will take discipline into the fourth quarter for them to come down to normal levels.'' >>

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next