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

To: victorw who wrote (48847)	8/4/1999 10:57:00 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

(Wasn't today a contract high for gas??) we're gonna see many new nat gas highs... ...just a few stats from Mark Urness of Solamon Smith Barney's; excellent Oil Patch Weekly 7-30-99: ===================================================== · The weekly US rig count decreased to 602, three rigs below last week's level and 26.8% lower than 822 a year ago. The oil rig count remained at 102 while the gas rig count decreased by three to 498. The Canadian rig count increased by 20 rigs to 239. · Worldwide offshore rig utilization decreased to 73.8% this week, compared to 91.3% a year ago. Gulf of Mexico rig utilization was 67.6%, up from 66.7% last week. The number of Gulf of Mexico jackups contracted increased by one to 95, and the number of cold stacked jackups in the Gulf remained at 16. The number of jackups working decreased to 90. Worldwide, a total of 54 offshore rigs are now cold stacked, including 33 jackups, five semis and 16 other rigs. ==================================================== ...I think this drives home once again the clear separation of fundamentals & near term upside in the E&P's vs. the driller/service companies. It takes approx 550+ Rigs Drilling to replace US Nat Gas consumption - we only have 498. The near term price expectations for Nat Gas are looking better every day. We are in the sweet spot of both increased demand - but also decreased supply ! ... $3.00 Nat Gas here we come ! From a driller/service stock perspective - lets be honest; 602 rigs working vs. 822 last year. The drillers need an incredible 33%+ rise in the number of rigs drilling just to be at last years levels - and this time last year wasn't exactly dayrate nirvanna for the drillers ! We ''aint'' no where near the utilization to impact dayrates enough to support some of these prices imho. The land & shallow water drillers have very high optimistic expectations allready fully priced in here. We had better have a huge utilization uptick - just to support present shareprices in many driller stocks... ... dropped 3 rigs over last week. We've got 20 weeks left in the year - and are 200+ rigs under last years utilization numbers; we need to be gaining 10+ rigs per week just to be on track by year end... when we drop 3 - that aint a good thing... The ''big'' story imho; is that we are not replacing Nat Gas.... with a historic heat wave & a substantial demand spike for Nat Gas fired power plants; if we have even a normal winter - let alone an early one, or a harsh one --- those calls for the potential of $6 - $10 Nat Gas are not so outlandish... Can you imagine ? $3.00 certainly looks like a gimme here...