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

To: ron peterson who wrote (47277)	7/2/1999 4:56:00 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Individual trading opps/stockpicking ie: MEXP CRK EGEO etc. Ron; yes - MEXP's press release is very positive news. This is a buying opp still; as this good news and most importantly the announcement of the companies forward looking plans - verifies a bottom is in - no BK risk; none ! This is the best risk/reward buying opp yet. Tuesday I wire more cash into my broker acct - earmarked for MEXP. EGEO is an ''option'' at it's sub $1 level - priced as such with arguably this being a very nicely upside leveraged bet against BK at an ''option'' price.... plus, virtually all of these oilpatch blowoffs have been very profitable ''bounce'' plays. 50% here seems very achieveable short term - nice trading opp here. -- the key is when to sell and not to get to greedy... take profits - but, then keep some ''zero cost basis'' shares for a longterm play... the bounce play alone is a good 50% -67%trade. But, I wouldn't be betting the farm on this - MEXP is a much better longterm play. I started trimming PGEI here - the downgrade is not a ''dump'' warning, but I think is reflective of PGEI's overly conservative, slowly unfolding development of their waterflood projects and other prospects. Their conservatism is admirable, but without stepped up development - which I and many anticipated, either through new partners, or their own increased cap ex spending given higher product prices... this waffles & flounders here... If this goes sub $ 1 7/8ths I'm back in, but don't see the nearterm upside of other issues like MEXP,CRK - so I'm trimming/selling out of PGEI here with a decent profit. This may be a gift if it waffles and stays under $3 through the 1st of the year... I'm getting out - but will keep and eye on it - it will be a $5 -7 stock as well sooner, or later - just looking more like later than sooner here... As far as the OSX vs. the E&P's - it is still a no-brainer imho. I only own some OSX stocks here because I like RIG PGO VTS and a few others for their longterm potential. This commentary by the drillers; should put a reality check into the likelihood of any type of substantial nearterm breakout imho. Without substantial rig count improvement and dayrate increases - we won't see OSX 100 real soon imho. =================================================== <<''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.>> ==================================================== The E&P's are getting lower drilling costs and much higher crude oil & gas prices; those that have drillbit upside, or are growing production have huge upside from here; and virtually all E&P's will show year over year improvements from last year in the coming quarters; the OSX will not ! I actually think that some of the backlog oriented mfg/svc stocks could see some shorting pressure - as the drillers are the mo-mo play, that get run up first on higher expectations of increased activity based upon crude/gas prices. But, the mfg/svc companies will not necessarially see new order inflows off of this intial ramp up in activity. New Rig construction especially could be very weak... look at how many Rigs need to go back to work; and read the comments on dayrates for even the newer deepwater Rigs... not boding well for many new deepwater newbuids ? The funds will allways flock to the 3 amigo's who allways have good liquidity - but not the upside of the rest of the OSX ( SLB HAL BHI) then the next tier Steet fav's of SII WFT CAM BJ's WFT (these are a smart play on the initial recovery) and the drillers who are a tougher call as; one must decide as an example if the Jack Up/Land Drillers are fully valued here ? RDC ESV NBR PTEN UTI - not cheap ? versus DO RIG - oversold ? , or MRL NE as balanced plays, or FLC PDE as the leveraged higher risk plays ? I think for the longtermers here, VRC, the new FGI-HLX, UFAB, GIFI, IIR, NOI are real cheap. Also, I like PGO, VTS, CXIPY, SCSWF, CDIS for a seismic/subsea higher tech play basket. Bottomline; the overall market recovery here is NOT good news for the Oilpatch; the Oilpatch has to compete short term with poor and even still declining fundamentals against a rising overall market tide... as such; It's "STILL" a no-brainer E&P play imo.