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

To: Fun-da-Mental#1 who wrote (47602)	7/8/1999 6:25:00 PM
From: double-plus-good	Read Replies (1) \| Respond to of 95453

Fun-da-Mental, (OT) I'm not sure i should expect someone of your skills to have a handle on the futures side of gold trading, but I, for one, am finding the climate in gold to be so impossibly bearish that I'm beginning to put some of my osx profits into medium term calls on the blue-chip producers. The contrarian in me is making me do it. The charts of Barrick and Newmont look like kissing cousins to the charts of the big-cap osx stocks as they repeatedly tested the lower limits. As all the small scale producers cease production and market psychology adjusts to the relatively small bank sales the stage could be set for a real nice bounce. One thing not really discussed in the equation of supply and demand is the asian recovery. Gold will never lose its status in asia. Even among the very lower class a very large amount of gold must be given by the groom to the parents of the bride. New Year's celebrations are typically marked by gifts of gold and simply put "gold is status." As the recovery in asia continues the demand side of the equation is likely to improve markedly IMO. I probably sound like a gold bug, but this is the first time i ever bought anything gold related. I'd be curious to hear your thoughts if you care to share them. TIA, brian

To: Fun-da-Mental#1 who wrote (47602)	7/8/1999 6:36:00 PM
From: RBlatch	Respond to of 95453

Welcome aboard Fun-da=Mental! Nice handle. Cordially, RBlatch

To: Fun-da-Mental#1 who wrote (47602)	7/9/1999 3:49:00 AM
From: upanddown	Respond to of 95453

Welcome, Fundy. How come nobody's talking about Precision Drilling (PDS)? Good question. Looked at it months ago. Liked it a lot but let it pass. Bad decision. We need more discussion of Canadian and other non-US issues. We sometimes have a bad case of GOM-itis (proud producer of 1.7% of world oil) around here.<ggg> Not dissing the patch but just trying to be realistic. Its my opinion that the health of the world energy business does not depend on drilling activity in the Gulf of Mexico OR GOM rig utilization OR US land drilling OR US crude stocks. They are important factors but not the overriding factors an overview of this thread would indicate. I am actively trying to "international-ize" my holdings. A Canadian company was mentioned in a Barrons article this week. It was an interview with a hedge fund manager with an impressive record. I'll patch it and maybe you could let us know if you have an opinion on it. John A: CE Franklin is the largest distributor of oil-field supplies in Canada. We own just over 9% of the company. Back in the previous upturn two years ago, they earned 70 cents a share. In the current downturn, they are losing money. However, they have cut costs and we believe their earnings will rebound quickly as oil-field activity increases. We think the rebound in activity will be particularly dramatic in Canada, where natural-gas prices are higher than at any time in the past 10 years, and overall drilling density is one-sixth that of the USA. Q: Meaning what? A: Only 16% as many holes have been drilled in Canada per square mile of prospective area as in the U.S. I just spent four days in Calgary at an energy conference and I can say almost for sure that producers will be dramatically increasing their drilling activity in the next six months. We expect CE Franklin to get its earnings back to 70 cents a share in the next few years, which at a 15 P/E gets you to a $10 Canadian price target, versus $4.50 currently. An added plus is that Smith International just picked up a 52% ownership position in CE Franklin through merging their Wilson Supply with Continental Emsco. This has created the largest oil-field distributor in North America. We think that at some point they will want to own the rest of CE Franklin to consolidate operations. Finally, we think John Gilbank, their CEO, is an excellent manager and will do whatever is required to realize value for his shareholders.