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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Rob Shilling who wrote (42528)4/18/1999 4:22:00 PM
From: marc chatman  Read Replies (1) of 95453
 
<<The drilling industry may become a much more steady performer in terms of earnings and revenues in the years to come.>>

I couldn't disagree more. The drilling industry will always be cyclical. It will inevitably go through boom and bust -- when utilization and day rates are good, the drillers will build more rigs. When they build too many rigs, supply will outstrip demand, and utilization and day rates will come down.

I'm about as bullish on OS as anyone for the time being, and I've put my money where my mouth is. But, if you think the drillers will be able to avoid boom and bust, check back in 5 or 10 years.

One more point -- OPEC will eventually mess up. But that's just the nature of a cartel. Hopefully world demand will outpace OPEC's future production increases, at least for awhile.
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