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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Lee Fredrickson who wrote (7503)1/10/1998 7:03:00 PM
From: bw  Read Replies (1) of 95453
 
The following posts are from the MF oil board..There have been some great posts today. I'll post them and hope it doesn't bother anybody to share their views..being all anonymous. Start with one today from Pengr:
<<You're also in this industry, though. From your business perspective do you see the forecast earnings potentials threatened? What I mean is do you see utilization decreasing? Do you see dayrates flattening -- or declining?>>
The future earnings of the drillers will continue to strengthen so long as the price for oil and gas do not go much lower. The drop in gas prices from $3.50 in Nov.to $2.10 in Jan. is very concerning. Hopefully, we will start having some winter across the country and the price will move back upwards.
I think that we have seen the brunt of the run-up in dayrates. I don't expect there to be significant increases from these levels, absent a very strong move upwards in the commodity prices. This, with the exception of the land rates in Okla---where I expect rates to rise by around 50% (to Tex., La, dayrates) over the next 12-18 months.
If we go into a worldwide recession, demand for oil and gas will decline, putting pressure on prices. This is a concern. Hopefully, this won't happen---- only time will tell.
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