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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Crimson Ghost who wrote (60121)2/10/2000 8:07:00 PM
From: Think4Yourself  Read Replies (1) of 95453
 
I am getting mixed signals from the analysts. On one hand they are saying that OS is going to benefit because producer capital spending always goes up dramatically when prices are sustained at high levels. These are the folks like SSB.

Then there are those who say that the producers are going to get punished by the market if they don't get their balance sheets cleaned up and make their companies provide a good return on investment. The producers seem to be listening to these folks since the stock prices suggest that THESE people are the ones with the investment dollars. This could explain the very conservative approach of the producers to high energy prices.

I believe things are going to be a lot different this time around. There is LOTS of 3-D seismic data out there, and it is of high quality relative to prior boom-bust cycles. I believe a LOT fewer wells are going to be drilled this time around, with a lot fewer dry holes. Also think a lot more of those wells are going to be drilled in deep water and ultra deep water. If I am right, companies like FLC are going to have trouble marketing all of those shallow water jack-up rigs. Perhaps Big Dog would care to comment on this?

In summary, it appears that looking to past cycles to predict this cycle may not be appropriate.
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