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

To: ChanceIs who wrote (48552)	7/29/1999 12:11:00 PM
From: SliderOnTheBlack	Respond to of 95453

< The train may be leaving the station for the natural gas land drillers. > ChanceIs; I agree with your comments that the land based drillers may be turning the corner here as the demand for increased nat gas production comes on line. But; I do not think that in the next 2 quarters that the cap ex spending sector-wide is going to increase to the degree that people think it will. PTEN NBR UTI and even the shallow water jack up drillers allready imho; have great forward looking expectations ALLREADY built into their present shareprice. They are near 52 week highs with earnings & fundamentals (rig utilization, dayrates etc) well below where they were last year - when they were last trading at these prices ! - the forward looking expectations of increased nat gas drilling is ALLREADY priced into these stocks to a great measure imho. - conversely; the E&P's themselves do NOT have present, or nearterm expected gas prices factored into their shareprice ! - this is an individual investors ''anomaly'' opportunity. While these small cap E&P's do have some degree of risk; they really do not - as the present environment for gas prices, cash flow etc. is a pretty safe environment here... ala' all the new refinancing, secondary offerings etc. These sub $5 stocks can not be purchased by many Mutual Funds, or Institutions - this gives an artificial downside imho. I love to pick up stocks at $3-$4 that have a track record of trading over $5 and the fundamentals to support it. When these stocks cross over the magic $5 barrier- thus allowing Mutual Fund & Institutional buying; they often breakout substantially. Given this Winters Nat Gas markets potential - this is a gift horse buying opp for the individual investor. Many, many Money Managers want to be into the CRK's of the world and they will be as they cross over that $5 barrier...imho. Another thought; remember the September rally last year off of the August blow off. All of a sudden these stocks will no longer be anywhere near their 52 week highs (as they are now)... could be food for thought...will be interesting if this changes the Streets mindset toward the Oilpatch. Many stocks will be 50% from last years ''rally'' highs and will look like an even better buy - very soon. Y2K - also, imho; benefits the actual producers more than the driller/service stocks. Big Oil isn't going to increase cap ex spending, order new products because of a potential spike in Crude, or Nat Gas prices... but, the E&P producers sure could get an extra jolt to the bottom line if we see a 2-3 week - 1 month spike off of any Y2K surprises...