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: WWS who wrote (53493)	10/25/1999 12:01:00 PM
From: SliderOnTheBlack	Read Replies (3) of 95453

re: Buffet & Energy Sector entry - I was in Omaha & Des Moines on my trip & just returned this am... This is quite the topic of conversation given his entry into chemical stocks earlier. NG/Utilites & chemicals versus his more traditional holdings in Coke, Gillette & McDonalds et al ? I don't think his entry into the NG/Utility sector can be over reacted to. The NG story is going to be huge... Now if he were also rumored to be looking at a certain "driller" who is presently selling for .36 of Net Replacement Value... that; might really make the OSX interesting - now wouldn't it(VBG)? Buffet finally seeing value in both the Oilpatch & NG/Utilities ??? - he'd better make some smart moves after his "nifty 50" have taken a dive of late... Buffet buying commodities as inflation rears its ugly head at the bottom of the CRB cycle ??? hmmmm ? Earnings for E&P's are incredible. PXD .46 cents per share for the qtr/$2.04 on an annual run basis & this qtr included some poor hedging that comes off going forward. Also PXD was heavilly overweighted to cap ex spending in the 2nd half & especially Q4. The 2000 fiscal year eps estimates for PXD were only .37 cents for the entire year 2000 - they just beat the entire year 2000 estimates in this quarter alone with poor hedging ! and this is a $10.50 stock here ? PXD could easily earn $3.00 eps in 2000. = a 3.5 PE ? Estimates & price targets are going to be vastly increased here shortly - remember PXD was a $25 stock last year - and $40 at the cycle peak. Did someone say "coiled spring" ? - absolutely... re: OEI - just simply wait... PXD UPR OEI are balance sheet turnarounds who have the most "upside surprise" and potential upside to analyst revisions here. I love this "3-pak" for that reason. Merrill's comments on many funds/managers liquidating E&P sector gains for a currency to buy rotate into other beaten down sectors here is valid. These will bounce back and bounce back strongly. Still ideal prices in which to accumulate here. The upward revisions to eps & cfps are going to really raise price targets and valuations dramatically here. - "when" not "if"... BSNX remains a gift here - even given their release; one analyst upgrade to strong buy here on compelling valuation. If we see nice API #'s with a strong drawdown; this could get real interesting - real fast... There could be some real tempting short term gains staring us in the face ? I would expect some heavy profit taking on an initial break over OSX 80; with perhaps OSX 85 being heavy resistance on this first move here. But; that pullback will see the Institutions reload heavilly - as they have to; or miss a fundamental led breakout of crude prices off of supply drawdowns; leading to a realistic run on OSX 100 by year end. GaryB; it will be interesting to see if the selloff/profit taking from resistance - be it OSX 80, or 85; takes us down to your targets ? If the timing is right - certainly could happen off of a total DOW selloff. I think the key is the DOW. If the Dow breaks down to 9500ish - then I could see a test of OSX 60-65 potentially; but if the Dow bases here; I would think the rush back into the Oilpatch by the fiscal year end sellers here of late; will add support strongly to the OSX anywhere near 70ish once again. From there - it may be a turn on a dime run through OSX 100. It's going to be real interesting - real soon here once again.

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