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Gold/Mining/Energy : Ensco International Inc. (ESV)
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To: Douglas V. Fant who wrote (957)3/30/1998 3:14:00 PM
From: Chuzzlewit  Read Replies (2) of 2005
 
Doug, Baird and other ESVers: The economics and the fundamentals of ESV along with many other members of this group are so compelling that it makes me wonder what the market is discounting that we don't see. Baird has made an excellent case detailing the very loose connection between oil prices and exploration budgets. Any analyst who has looked at the income statements has to come away impressed.

This leads me to believe that the market must be focused on the potential to overbuild rigs and destroy the favorable ratio of rig supply/demand, similar to what happened with the hard drive manufacturers. But this doesn't make much sense because of the long lead times for rig building and the shortage of trained labor to work the rigs. This isn't a business where you can simply put on another shift.

So I continue to be bullish about the sector, and ESV in particular. I just wonder how long it will take for the market to come to grips with the facts.

Regards,

Paul
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