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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: isopatch who wrote (70754)8/13/2000 4:40:38 AM
From: Douglas V. Fant  Read Replies (1) of 95453
 
isopatch, Will do, now...The Twelfth Annual Rocky Mountain Investment Forum in Denver all of last week was sponsored by the Colorado Oil & Gas Asssociation and all of the major Wall Street Brokerage Firms, Merrill Lynch, Morgan Stanley Dean Witter, Goldman Sachs, Deutsche Bank, UBS Warburg, just go right down the line of the top 20 firms.

The Conference was ostensibly an oil & gas conference where energy and Wall Street reps could mix, but really focused pretty heavily on the convergence of the oil, gas, and power industries. Indeed numerous power industry reps were present- and from all over Timbuktu.

I came out of the Conference with a series of strong impressions. First what Big Dog and other have said for some time. Data points to insufficient drilling to replace natural gas reserves. Be prepared for price spikes.

Worldwide usage of NG will grow right into and through the Year 2020- up to 250 TCF NG used annually worldwide by 2020.

NG is viewed as "good" new economy fuel and oil as "bad" old economy fuel relatively speaking by Wall Street. NG demand will grow consistently through 2020 while oil demand will flatten especially as fuel cells (NG-powered) vehicles take over from gasoline as the main auto transportation fuel over the next ten-twenty years as fuel cell infrastucture gets built.

NG has already supplanted oil in the power generation industry largely....With FERC moving power markets to an ecommerce-based model, NG companies look more "sexy" as they trade NG by Internet and burn NG and move those electrons deals via Internet-based transactions....

Oil is not seen as having the same Internet-based market potential...So will Wall Street accord higher P/E ratios to companies weighted in NG and also active in the gas-to-power sector?

And if you look at the fuel progression for the last 200 years of industrial revolution advanced industrial societies have been moving foorm fuels that put off much carbon-based pollution with low BTU value (i.e. wood) towards fuels with high BTU contents but that put off low carbon-base dpollution (first NG and later hydrogen over the next 25 years).

Finally advanced drilling and 3 and 4-d seismic techniques have revitlized the Rocky Mountain Energy industry- Lots of good NG discoveries of late in the Rockies.....And LNG terminalige will double over the next few years from 3 to 5 bcf/day of NG. But that's still piddlin' compared to 55 bcf/day NG consumttpion average and 100 bcf/day on strong pull days....
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