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: RGinPG who wrote (32047)	11/23/1998 4:31:00 PM
From: Aggie	Read Replies (1) of 95453

RGin PG, hello It looks to me like we're moving into a self-fullfilling paradox: Big oil has started to panic and are cutting budgets right and left during a time when drilling and finding costs are at all time lows, leading to more panic and more cutting. Considering that deep water developments typically have a 3-5 year time frame from discovery to production (if they are fast-tracked), I would think that this would be an ideal time to be contrarian: Pick up a deep water floater on subcontract from some other schmuck operator who has it on long-term contract. Right now these can be subcontracted for 70-80% of their contracted day rate. Unfortunately our industry is driven by one-year spending segments. Hard to sell the idea of a multi-year long term savings to stockholders who are looking at negative returns already! Just my 2 cents worth. What do you think about crude oil futures right now? They look pretty good to me. As for the OSX stocks, color me long. Thanks and best of luck to all. Aggie

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