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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: isopatch who wrote (71141)8/18/2000 10:39:08 AM
From: rz  Read Replies (2) of 95453
 
I don't do E&Ps but am very much interested in Western Canada. There is a lot of drilling going on over there. More is coming because of the Alliance pipeline, that is scheduled to come on-line later this year. Unfortunately, the drillers that I know who operate in the area are already expensive.

Another way to play the area is thru workover rig operators. These guys perform well completion, servicing and abandonment.
The largest Canadian operator is Bonus: bonusgroup.com.
You can get their quote from: tse.com (symbol: BOU)
or Yahoo (symbol: BOU.TO).

Baker Hughes has North American Workover Rig Count at:
bakerhughes.com.
From there, you can download the Excel spreadsheet and see that this year's Canadian workover rig count is already similar to 1997.

The rates are not there yet, but will be soon, I believe. Bonus just passed their slow season (spring). Judging by how they have been making money this year, they should beat Yahoo estimates for this year, by far.

Downside:
1. The stock is very illiquid (market cap is about USD 100 mil), so you have to be patient and sensible.
2. As jim_p mentioned: this is a low-tech, commodity, low barrier-to-entry type of business (never stopped KEG buyers).

rz
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