SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : Strictly: Drilling and oil-field services
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: sand wedge who wrote (13155)2/28/1998 8:58:00 PM
From: Bill Li  Read Replies (1) of 95453
 
Research Alert!

1. The following cos ests have been cut by 5-10% for both 98 and 99 over in ML:

BHI BJS CXIPY/F GGY RON DI HAL NOI PGO SLB SII WAI WII WG DO ESV GLM

* Reason ---the high probability that oil prices will remain weak and under pressure over the near term.

* Maintaining their positive intermediate and long-term stance for the oil service group, since that 1998 and 1999 numbers are already being priced into the group.

* Believing that the current weakness in oil demand growth will be short
lived (even in Asia) and that the excess supply of oil is short-term in nature.

2. The DLJ energy conference ended yesterday (Feb. 27,1998) on a
high note, with the offshore drillers making a very spirited case for
continued strong activity levels, with any downturn that may occur being
relatively modest and short-lived.

Some of the key conclusions at the end of the conference were:

o Offshore drillers remain very optimistic about business and see
minimal earnings risk: The offshore drillers have most of their rig time
contracted for 1998 and continue to see rigs roll over at higher rates. The
strength in natural gas prices and strong deepwater interest are the
primary reasons for their optimism.
o Consolidation more likely among service companies than drillers: The
offshore drillers have all considered consolidation but do not see the
synergies that service companies do.
o So far the producers have largely been all talk, which will cause no
rate reductions: The drillers and service companies will not lower rates
unless demand declines.

3. Review of Consolidation Trends and Recent Oil Price by Goldman Sachs (February 27, 1998)

* They continue to believe that 1998 will be a year of positive broad-based
industry consolidation.

* Although a falling oil market may serve to accelerate companies' desires to consolidate
(and thus evidence some synergy-derived growth), they believe the key consolidation
driver is the fact that the customer base of the oil service industry has begun to focus on
Exploration and Production growth for the first time in more than a decade.

* They reduced their 1998 oil price forecast, to $16 per barrel, WTI posted.

* Near-term, our preference is to remain with leading deepwater and/or international
offshore drilling companies.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News