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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: RealMuLan who wrote (17480)4/1/1998 1:06:00 PM
From: Big Dog  Read Replies (2) of 95453
 
For reflection -- The high cost of deepwater operations and the enthusiasm to continue in the deeper plays is slicing a double-edged sword though drilling budgets. Based on a genral increase in costs -- of which deepwater drilling is a major contributor -- drilling budgets are being cut. However, because the deepwater section of the budgets are being retained, the influence of this factor grows. In real terms this means that as costs rise and profits drop (due to lower oil prices) the deepwater effect will penalize overall drilling activity.

What does this mean to my brethren? I would say one should focus on the deepwater (for the longer term horizon)...not that this is any newsflash, but maybe just a gentle reminder.
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