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: Sonki who wrote (6307)	12/30/1997 7:37:00 PM
From: Lucretius	Read Replies (2) of 95453

<<does any one know why SLB shot up $4 at the end of the day? thx.>> More buyers than sellers? Sorry, couldn't resist that! I've been waiting to say this, but I thought I'd jinx the rally. Perhaps the downward spiral is over, but I don't see new highs anytime soon in our future. I'd be happy w/ breaking above the 50dma. Nice day, though. Most drillers closed above their 20 dma. Haven't seen that since November. Disagree w/ the boat analysis. TDW and other co's like lit rely on ever increasing number of rigs to service. If the number of rigs remain the same and the fleet of ships grows gradually. The dayrate growth for the boat guys will slow and eventually stop. Supply of boats vs #of new rigs to come on line that's the name of the game. The drillers can not build a single rig and their dayrates will coninue to increase as long as the E&P guys still demand their services. The boat dayrates, however, will peak in this scenario as the number of boats required to service a fixed number of rigs remains a constant. Throw in an explosion in rig building, and yea you'll see big increases in supply boat rates and a drop in driller dayrates. But that doesn't look to be happening. The drillers learned their lesson in the 80's. Good Luck! -Lucretius

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