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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: quehubo who wrote (26435)	10/17/2003 9:23:14 AM
From: Ed Ajootian	Read Replies (1) of 206085

Que, Bottom line to me is that we now have "normal" storage levels yet both the 12 & 18 month strips are > $5. The First Call consensus estimate of '04 gas is $4.52. This says just about everyone (with the exception of those "sophomoric" Lehman guys <g>) believes we have made a step change to $4+ gas. As shown by that Ray James piece that came out a few weeks ago the ROI rates for a company that can keep its finding costs around $1.50/mcf are quite robust with a $4 gas price. So E&P stocks are gonna do quite well in this environment IMO. What's not so clear (at least to me) is whether oil service stocks will do equally as well. I can see a scenario where E&P stocks make decent money but the oil service companies just keep plodding along, making a little more than presently but not a lot. With a company like PTEN trading at > 30 x current earnings this would seem to indicate that the OSX stocks could have further declines ahead, even in a decent E&P environment.

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