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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Tommaso who wrote (94284)10/22/2001 9:10:22 PM
From: The Ox  Read Replies (2) of 95453
 
OK,
I'll take the bait. Back to drilling. I suggest looking at GRP and PTEN as 2 potential investments in the patch.

PTEN, the 2nd largest (based # of rigs) NA land based driller is the result of the merger between Patterson and UTI energy. The stock has fallen substantially from it's highs since it's rig usage and pricing is based on demand which has fallen with the drop in NG prices. With NG in storage at the highest levels in years, it's understandable that the commodity price has fallen. At the same time, the depletion rate for NG wells is also at an all-time high and therefore we must continue to drill for new sources to keep up with the steadily increasing demand. This year we've seen a blip in demand due currently to the recession and previously due to unusually high NG prices earlier in the year. A cold winter which could bring on higher NG futures prices should light a fire under this one.

GRP, Grant Prideco. Relatively new to the NYSE, GRP was spun out from Weatherford (WFT). GRP is the world's largest supplier of drill pipe and other drill stem products, as well as a leading North American provider of high-performance engineered connections and premium oil country tubular goods (OCTG). They are highly dependent on the number of wells being drilled for their product revenues, so as the drilling rates soared and the number of rigs started to decline, this company has been sold off sharply.

Anyone care to discuss the pros and cons of these 2 companies?
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