Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: chuck weir who wrote (18538)	4/8/1998 11:39:00 PM
From: Douglas V. Fant	Read Replies (3) of 95453

Chuck- From Solomon Brothers Report on Noble Drilling- Assessment of fundamentals of service and drilling industry: "We recently spoke with approximately 15 of the largest oil companies-those with upstream spending of at least $1.0 billion in 1998-and found that none of these companies has yet reduced its 1998 spending plans, that several of them are developing contingency plans, and that none of them believed in a new oil price paradigm. Large oil companies make up approximately two-thirds of the total spending in our survey. Based on recent discussions, we believe that the most likely case would be only a 2%-3% reduction in spending by these companies. "We expect average day rate to advance to almost $60,000 by the end of 1998. "We believe that the market has been discounting bad news on oil prices into stocks with exposure to the price of oil as well as discounting a scenario of flat or negative spending in 1998 and substantial reductions in earnings estimates for oil service and drilling companies. We believe that these stocks remain attractively valued and recommend purchase. Our Top Pick in the drilling sector is Noble Drilling. " [eom]

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