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: double-plus-good who wrote (52140)	9/29/1999 2:04:00 PM
From: SliderOnTheBlack	Read Replies (2) of 95453

Hard to find "buys" on this rally; but here's one... Miss OEI's move ? - here's a sister play... PXD - Pioneer Nat Resources. Very similar play to OEI UPR - deleveraging, heavy debt; but substantial upside leverage to commodity prices etc. PXD down from the $40's in the 1997 run up; has completed its disvestures & property sales. Debt down over $500M this year; producing costs down over $2 boe from 1997. This is an excellent large cap - $10 & over; E&P laggard play here. Lagging its peers on all valuation metrics; but now getting upgrades. For a large cap - selling at only 3 x 2000 cfps; this multiple will easily expand to 5; 5 x $3.35 = $16.76 Currently $10; and has not "popped" here yet... with todays upgrade , and it positive Q3 release coming - NOW is the time to jump on the laggard, undervalued E&P's. I agree on CRK in the small caps, RRC as well - but, in larger caps - this may be the best buy. Was near $13 weeks ago; off 30% here. One major driver in the next 2 qtrs will be that in July; PXD increased their remaining 1999 Cap Ex spending by 80% !!! to $180 M. This gives lots of upside to production, revenue & cash flow growth. Company has high impact offshore GOM & Offshore Africa drilling projects commencing... On sale today... one of the last ones. SSB upgrade of late - target is $14.75 - not factoring in the increased cap ex spending results... A chip shot from $10-$13 imho...

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