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

To: Ed Ajootian who wrote (50498)	9/6/1999 11:39:00 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 95453

ON THE MARKET; Natural gas stocks ready for solid year Source: Boston Herald Many Labor Day travelers are heading to the beach this weekend for a last summer hurrah. Gas-production companies, though, are eagerly awaiting cooler weather. It should be a profitable winter for those who invest in companies that deliver natural gas, propane and other similar products, analysts say. "The outlook for gas is extremely positive," says Bear Stearns analyst Kevin Boone. "Prices are coming out of the doldrums." Less gas in storage this year, compared with the past two years, is the main reason for the higher prices already being seen, says PaineWebber analyst Ronald Barone. Drilling activity on a week-by- week basis is significantly lower, too. "For this year through Aug. 20, the number of rigs drilling averaged 554," he says. "Last year it was 890, and the year before it was 914. That's a tremendous contraction." This is happening at a time when demand is expected to increase 2.5 percent to 3 percent a year over the next few years, Barone says. A Standard & Poor's analyst, Norman Rosenberg, says gas producers are poised to benefit - especially if we see a cold winter. Ronsenberg likes [Anadarko Petroleum]. "It has a long history of finding reserves and adding to reserves faster than anyone else," he says. He expects Anadarko's stock price to hit $42 in six to 12 months. He also recommends [Enron Oil & Gas], calling it one of the best-run companies in the business. (Enron will soon be known as EOG Resources.) Barone favors [Enron Corp.], the former parent of Enron Oil & Gas. He says it's best prepared for the changing environment because of its forward-looking management. The stock price, Barone predicts, will reach the low 50s in the next 12 months. [Coastal Corp.] is another stock Barone recommends. He thinks the company's gas production will increase 30 percent this year and next. "The company will have significant earnings momentum this year," he says. He has a price target of $52 on the stock. [El Paso Energy] is also on his buy list because, he says, it has the best pipeline system in the United States and is undervalued, relative to the rest of the group. The stock, trading in the $36 range, should rise to $42 or $43 in the next 12 months, he says. Bear Stearns' Boone likes Williams Cos. In addition to having a healthy gas business, the company is expected to spin off a telecom business, which Boone says will be an attractive company. Dynegy, a pure play in gas, is another Boone favorite. "They're starting to build up generation assets," he says. Investors should also look for a lot of merger and acquisition activity in the gas industry. Though Boone says virtually any company could be a play, he warns investors to be cautious. "Don't ever invest just because companies may be acquired," he says. "The sector has some great fundamentals and it's undervalued, and takeover possibilities are just the gravy." (Copyright 1999)