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Strategies & Market Trends : InvestRight - Short Term Trading St
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To: Jeffrey L. Henken who wrote (260)9/24/1998 5:49:00 PM
From: Tensane 1  Read Replies (1) of 939
 
Jeff,

Here's another oil drilling play that's ineresting--Cliffs Drilling(CDG). They are being acquired by R&B Falcon Drilling. They have drilling operations throughout the world and R&B has the financial clout to ride out the downturns in the business. If you buy CDG, you will get 1.7 shares of FLC when the merger is done,effectively buying FLC below market. At Cliff's high this year it was $82. It got down to 13 1/4 a few weeks back and is now at 21 3/8. One thing you may want to do before you jump into this sector, is look at the chart for "light sweet crude". After bottoming in the $13.50 level, it has been on a tear since the beginning of the month. As of yesterday, it was in the $15.80 range. According to Standard and Poor's, they expect oil prices to stay in the $13 to $15 range through next year:http://biz.yahoo.com/prnews/980914/s_p_rts_oi_l.html

Personally, I feel that oil will go up from these levels but not before testing the $14 range again. I think the companies that have long term contracts in place will do the best. Here's a press release from R&B that you may find interesting:http://biz.yahoo.com/rf/980923/bj9.html

I do believe the oil sector will shoot up again.

Kevin
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