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: The Ox who wrote (51089)	9/14/1999 12:39:00 PM
From: SliderOnTheBlack	Read Replies (2) of 95453

Happel<Cause the selling by making the downgrade announcement and buy from all the chicken littles.> You've got that right... I agree that longterm - one could literally throw a dart in the OSX for 30% to 50%+ gains in the next 12-18 mos. Many will do better... I just think that the fundamentals and the shareprice valuations in the E&P Sector are much, much more attractive here - and will continue to be so for 4-6 mos. The OSX could move to 100ish here off of rotation from the overall market on Y2K, another Fed Rate hike etc. Anything here around OSX 85 sure looks to be a nice buy. I don't think that the Q3 earnings reports will have virtually anything positive; but conversely - nothing surprisingly negative. The OSX companies are in transition. The Cap Ex spending just will not come untill the beginning of 2000 - and it will be Q2 2000 before the OSX companies report upside gains from the prior years quarters - that will be the catalyst to where the sector outruns expectations & really takes off. Just watch Rig counts & dayrates & orders/backlogs - that is the only thing that anyone needs to follow; Right now - there is not a direct "connect" to Oil Prices. The "direct connect" is what the E&P's have - and again; cash is flowing to the bottom line - right now. Untill we see 135-150 GOM rigs at work, rising dayrates, new orders-rising backlogs; it's still an E&P game... and I am not talking micro's... OEI UPR XTO MRO PXD for example are not tiny companies... just a few choices in the mid- larger caps. I just feel I have a complete handle on the risk to the small & micro's ( MEXP RRC CRK HSE etc) - and the upside there dwarfs virtually anything in the OSX... one has to do lots & lots of "DD" to feel comfortable in the micro's & small caps; but it is well worth the effort... I think any retracement here prior to the OPEC meeting is a great short term trading opp - I would buy it - and sell the pop after OPEC announces continued cuts... as I think we retrace a bit, once again upon the reporting of Q3. That retrace - may be the last chance to buy OSX 85-90ish. I like MDR, GLBL, VRC on a return to 10-11ish, RIG is still too cheap, DO-MRL-SDC-RDC/ESV on any retrace of substance are no-brainers, PGO-VTS,IIR,HOFF - and the SII CAM WFT names will get the mo-mo of course... If I had to pick 2 to buy on a retrace: GLBL and FLC. GLBL see's $20 on any acknowledged full recovery and FLC $30 - I say by Memorial Day next year (VBG)! Good Luck Got MEXP ?

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