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

To: Aggie who wrote (48674)	7/31/1999 1:59:00 AM
From: upanddown	Read Replies (2) \| Respond to of 95453

Aggie I'am with you on some of those little E&P's. I gave in and have some CRK and OEI but I have problems with the kind of concentration in them that some people are accumulating. Assurances of golden futures, exploration success, NG price spikes, hot summers, cold winters.... hmmmm... maybe. <vbg> Their history sure doesn't indicate that. I like your "watching sausage being made" analogy. Did you see this statement? According to Fadel Gheit, industry analyst for Fahnestock & Co., the increase in capital spending will become more apparent as the second half of the year goes on. Typically, around 68% of capital spending occurs in the second half of the year. This year, around 75% will occur in the second half, Gheit reckons, mostly concentrated in the fourth quarter. I had no idea that there was so much seasonality in CAPEX spending. If Gheit is right, wouldn't that alone cause a spike in rig demand in 2nd half 1999? I do have another question I would like to pass by you. I've been reading statements by the bigwigs at these mega-majors that are being formed that basically say "we are only going to be interested in exploration plays that have MAJOR potential". Doesn't that say deepwater and away from shallow water and land, at least domestically? It seems like the elephants that are being found are all in 3000+ feet of water. I'am wondering whether this could mean a move away from jackups and towards floaters? I'd appreciate your inside the industry perspective. John