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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Maya who wrote (47170)	6/30/1999 9:09:00 PM
From: pz	Respond to of 95453

Wednesday June 30, 8:24 pm Eastern Time FOCUS-Oil service companies see gradual recovery By Andrew Kelly HOUSTON, June 30 (Reuters) - U.S. oilfield service companies, which provide everything from drill bits to seismic surveys for oil and gas companies, appear poised for a gradual recovery in earnings from the second half of this year, senior industry executives said on Wednesday. But specialized oil drillers, which rent out rigs and crews in return for a daily fee, will probably have to wait longer for a recovery in their earnings to materialize, executives from that industry segment said at a Houston conference. Dick Cheney, chief executive of Halliburton Co. (NYSE:HAL - news), the world's biggest oilfield services firm, said a recovery in crude oil prices since March and strong North American natural gas prices boded well for earnings. Halliburton expects its profits to bottom out around the middle of this year and then pick up gradually, Cheney, a former U.S. defense secretary, said. ''We think 1999 is the trough, and 2000, we think, will be significantly improved over that,'' he told reporters at a Banc of America Securities conference in Houston. Bruce Longaker, chief financial officer of Weatherford International Inc.(NYSE:WFT - news), an oilfield services provider, said the second quarter would probably turn out to be the low point for the company's earnings. But he cautioned that any recovery would be a slow process. Many of the larger oil companies were preoccupied with mergers while smaller companies needed to strengthen their balance sheets before they could step up exploration and production spending and place more orders with service firms. ''Customers are distracted. They're doing a lot of mergers and consolidation, and the independents still have to build up their cash,'' he said on the fringes of the same Houston conference. Transocean Offshore Inc. (NYSE:RIG - news), one of the top five U.S. drillers, expects its earnings to decline in 1999 and again in 2000, President and Chief Operating Officer Dennis Heagney said. Heagney said the company expected the decline because its deepwater drilling rigs were coming off long-term contracts and would have to be rented out at lower rates in the current slack market. ''I don't see a lot of increased activity for the next 12 months. It could be as much as 24 months,'' Heagney said. Santa Fe International Corp.(NYSE:SDC - news), another driller, said it expected its earnings to fall in 1999, in line with analysts' estimates, and did not foresee a speedy recovery in its markets. ''By the fourth quarter of next year, you might see a modest increase in dayrates, maybe up 20 percent or so,'' Santa Fe President and Chief Executive Stedman Garber said. However, it might take until the second quarter of 2002 or even until 2003 before dayrates for drilling rigs returned to the peak levels of 1996-1997, he added. Noble Drilling Corp. (NYSE:NE - news) Chairman and Chief Executive James Day said he expected his company's earnings to remain weak throughout 1999 but to start improving in 2000. Noble has greater exposure to the Gulf of Mexico which is expected to be among the first markets to recover. Many industry executives predict that drilling activity will have to be stepped up in the Gulf of Mexico to counter a tightening of natural gas supplies in North America which they expect to develop later this year. More Quotes and News: Halliburton Co (NYSE:HAL - news) Noble Drilling Corp (NYSE:NE - news) Santa Fe International Corp (NYSE:SDC - news) Transocean Offshore Inc (NYSE:RIG - news) Weatherford International Inc (NYSE:WFT - news) Related News Categories: US Market News

To: Maya who wrote (47170)	6/30/1999 9:23:00 PM
From: Hrothgar	Read Replies (1) \| Respond to of 95453

I've noticed more and more posters on this board talking bullish about natural gas and indirectly about massive uses of electrical power recently. There is one company I follow that has somehow escaped the mainstream discussion on this board. Coastal Corporation (CGP) is a diversified energy holding company that, in my opinion, stands very ready to take advantage of rises in natural gas and electrical power demand. Their latest earnings report from Q1 showed healthy EPS growth despite commodity price erosion. Since then, as we all know, those prices have rebounded substantially. On another positive point, Coastal has continued to increase its reserves and production levels at a pace significantly above the industry. In their latest press releases from this week, they confirm this by predicting double digit growth and impressive gas production increases. Coastal seems primed to take advantage of the continued rebound in gas prices and the deregulation of power generation taking place in th U.S. I own it for what it's worth...