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: Patrick J. Saunders who wrote (20611)	4/28/1998 1:48:00 AM
From: Douglas V. Fant	Read Replies (2) of 95453

Patrick, Yes. US gas production is falling, and pipelines from Canada while being upgraded cannot bring enough natural gas into the US market to make up the supply difference- so long term good. Short-term it's difficult to rely upon the Baker Hughes Rig Count for onshore work. Onshore rigs can be assembled and disassembled pretty quickly, and workover and snubbing rigs come and go effortlessly... So don't get too concerned if the weekly count judders around- look at the 10-week moving average instead. Onshore I'm in BJS, but any of the decent onshore service/drilling companies will do. Bottomline, the US has the lowest tax rates of any major energy producing nation in the world- so US production is important to all companies since you keep more of the dollars you earn if product prices rise. So yup, there are bigger undrilled fields overseas, but here in the US even small gas projects yield rates of return of up to 50%..... Sincerely, Doug F. PS. If you are ever in 30 degrees below zero weather, try this: take a cup of hot coffee and then throw it up in the air- often it will come down ice crystals before it hits the ground....

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