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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Teddy who wrote (14469)3/11/1998 2:57:00 PM
From: Czechsinthemail  Read Replies (2) of 95453
 
I'm continuing to think that the underappreciated story is the strength in natural gas prices. Last time I looked, they were up while crude prices were pretty much flat. Gas prices seem to be reflecting the increased demand from the cold weather impacting much of the the U.S., and as a domestic more than international market they are less OPEC influenced.
Although I continue to like the deep drillers like RIG because I think their continuing growth is pretty much in the bag, I'm starting to think that the bigger potential may be with some of the jackup drillers with heavy gas-drilling exposure. ESV, for example, apparently has about 80% of their Gulf of Mexico fleet engaged in gas drilling projects. And I believe someone indicated about half of MDCO's fleet is involved in gas projects. Here's a post that discusses it more:
207.183.153.23
If natural gas drilling remains a high priority and there are few new jackup rigs being built, the demand for those already out there should be remain very strong. It provides a strong backup against potential weakening demand for oil drilling projects.
If others have more information on the relative proportions of oil/gas drilling exposure the different drilling companies have, I'd be interested in looking at it. Thanks.
Baird
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