Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Michael Berkel who wrote (1806)	10/5/1997 9:04:00 AM
From: Michael Berkel	of 95453

Frederick, I just saw the article in Barron's online and it's a must-read for everyone interested in our sector. It is accessible by typing interactive.wsj.com For those who are no Barron readers: - article refers to Mr. John Tozzi who runs San Francisco based Cambridge Investments Ltd. - Tozzi is pounding the table for the driller and service groups - With the Dow knocking about 8000 "this group is still selling where it would be with a Dow 2000 or 3000 points lower. It hasn't kept pace" Tozzi is quoted as saying. - Tozzi says: "The world is now at 97% of proven producing crude oil capacity and this country is now at its lowest levels of excess natural-gas inventories in 40 years". The need to replace the world's rapidly depleting reserves is urgent. We are at a near-critical shortage stage for drilling rigs, trained drilling and seismic crews and just about every form of equipment and oilfield service. - Tozzi suspects "the incredibly powerful earings the drillers and service companies will release over the next few weeks could very well prove a "near-term catalyst" to wider investor appreciation of the group. You're going to see earnings 15%-30% higher than the Street estimates accross the board." - Oilfield-services sector should show earnings growth of 40% for 1997 and 1998. Yet our drillers are selling at only 10-12 times earnings. The following table is of interest: Company 1998/EPS 1998/PE Growth Rate ENSCO $2.57 13.7 58% NABORS $2.00 19.3 88% COOPER CAMERON (RON) $3.60 15.1 38.5% CLIFFS DRILLING $4.38 13.9 58% READING&BATES + FALCON $2.40 14.7 100% FRIEDE GOLDMAN $3.00 18.7 161% NS GROUP $2.20 14.3 144% Happy trading!! Michael Berkel

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