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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Chuzzlewit who wrote (25979)7/19/1998 3:27:00 PM
From: Elmer  Read Replies (1) of 95453
 
Chuzzlewit, very good point. I have heard some very knowledgeable analysts saying that this recent downturn may be a blessing in disguise for the long term success of this industry. They mention about how we were on the edge of some huge capacity and infrastructure increases when oil prices started to fall. Perhaps this most recent falloff will result in companies within this sector being a little more cautious in adding capacity when things turnaround. Perhaps, they will more strictly enforce requiring a return on their investment of at least 15%. I realize these guys like to grow their asset base through newbuilds, but maybe we will see at least a little hesitance to build new assets without receiving higher dayrates due to the recent downturn.

Elmer
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