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: Gottfried who wrote (59846)	2/6/2000 3:35:00 PM
From: Mark Adams	Read Replies (3) of 95453

It appears to me that the dayrate graph tells a new story. The high dayrates of 96-97, supporting peak OSX prices and earnings, appear an abberation and potentially excess investment in reserve development. If this is the case, then 'historically normal' day rates have returned. Earnings going forward may be as simple as the current run rate x 4, far below that which supported the historic highs seen in 97. Except for NorthSea Income, which could have another 35-50% decline to face. The longer term rigcount vs oil price shows rig counts can/will ignore short term spikes (1991), and possibly an improvement in drilling efficiency. The latter is speculation that same number of rigs able to keep pace with reserve development due to technology improvements such as 3D seismic and horiz drilling. I appreciate the effort in bringing this info forth. The dayrate graph in particular certainly modifies my view of where we are at, and where we may be 6-12 months out. Referenced links, supplied by Gottfried simmonsco-intl.com wtrg.com

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