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: 007 who wrote (21358)	5/4/1998 4:13:00 PM
From: pz	Read Replies (1) of 95453

007, <<< think the best opportunity in the entire sector is buying the land drillers at the bottom of the commodity price cycle. At that point, they have very little downside and the greatest upside. They're undervalued presently and are likely to realize much greater proportional gains from improving commodity prices. Why lock in earnings in the deepwater at a time when crude has very little downside?>>> I don't disagree with your assessment at all. It will just take time for operators to get excited about drilling again. Just because oil goes up to $18 or so doesn't mean that operators will be ready to drill again, this will be a slow process. These operators have just had their revenue cut by 40% and it will take a while to build up the cash reserves again. But like you say...this may be as bad as it gets. I happen to think that the downside risk in the land drillers is very limited, but the upside may be limited also for a while. I will definitely put money into the land drillers, but just not right now...they just need time...IMHO. Regards, Paul

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