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

To: RBlatch who wrote (50947)	9/11/1999 2:00:00 PM
From: AltLar	Respond to of 95453

IO, a designer and manufacturer of seismic data acquisition products used on land, in transition zones and in marine environments, is looking like an interesting laggard. Currently trading at about $8.00, it is up only about 50% from its February low and a long way from its old high of $40. It has a very clean balance sheet with $75M in cash and almost no debt. According to Yahoo it was scheduled to report earnings yesterday but didn't though it fell 3% leading me to suspect earnings may fall short of the .15 expected loss. If this is true and it follows the pattern of MIND earlier in the week it will sell off on the bad news, shaking out any remaining weak hands, clearing the stage for an upside breakout. My question to the thread is where in the cycle is the sweet spot for seismic equipment manufacturers and what kind of reputation does IO have? Discussion or speculation? Larry

To: RBlatch who wrote (50947)	9/11/1999 5:17:00 PM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 95453

RBlatch, Yes, with a time lag. First with a manpower shortage the OS companies will raise wages and fight to get the best workers. Then with capital budgets replenished, energy companies will move to drill more wells. The rigs won't be there so bids on rigs will start rising. My buddy who works with Nabors says that for onshore rigs profit margins fell from an average of $2500/day to the $1000/day range currently. We are in the "fight for the workers" phase currently. We move in the next couple of months into the "rising day rates for currently manned/womaned rigs due to competition phase" next.. (Yup there's a couple of extremely good looking-but well-muscled- women working out on the rigs)... Finally day rates will rise so high that the rig companies will bring out the remaining stacked rigs and put them to work too. In fact we just gave up a Nabors rig with a world class veteran crew. We danced a jig with upper level management trying to keep them under contract to us, but failed... Big Dog- You are in touch with the offshore rig industry- what is happening there?

To: RBlatch who wrote (50947)	9/11/1999 10:46:00 PM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

<the man power shortage actually drive up day rates for the drillers as this will cause a rig shortage > RBlatch - good point; but taking it even further - it implies that Nat Gas supply demand will not be able to be met; as they will not be able to put enough rigs to work fast enough, due to the manpower shortage. Every fundamental driver for Nat Gas is leading to a "rationing by price" atmosphere. Merrill's call of $3.75; and potentially sustained for a few months makes sense to me - and this is not even factoring in ANYTHING weather-wise; strictly based on the number of rigs drilling for gas. Another reason for leverage towards the Nat Gas pure plays in E&P land... Merrill Lynch is talking about$3.75 mcf Nat Gas by December. ML also made some interesting comments on the lagging E&P's here as a buying opp - pre OPEC meeting & with all the Energy Conferences. - a sweet spot buying opp imho. The upside to some small & mid cap Nat Gas E&P's at those prices - exceeds anything the drillers saw dayrate-wise at the peak of their cycle... $3.75 will be "DOUBLE" the realized gas prices of the first 6 months of the year. It's going to get real interesting... Also; IIR is a super opp here. Great Middle East connections and strong Intnl business. Made some good acquisitions - poised for the upturn. Together with NOI - you lock in a big chunk of the "Picks & Shovels" aspect of the coming upturn to onshore drilling; as they are the very companies that will supply parts & equipment to get these cold stacked rigs up & running... BULL - IIR is a great Intnl growth play longterm and is a buyout candidate sooner, or later - at a big premium from here. IIR is a $lihypster 10* pick (VBG)... I also like MDR & GLBL here; and very much so. MDR is a tremendous longterm play... there is no major player,with this level of cash. GLBL going on an acquiring run here shortly ? - buying HOFF ??? (VBG). I still like the E&P's nearterm for max upside- but the laggard service companies are looking very, very good here - on a selective basis. PS - in my homework of late - big warning on everything SEISMIC folks - imho. Read the 2000 AND 2001 forecasts or VTS for example... no where near the earnings levels of the prior run. I saw something keep popping up in my E&P research. Many of these companies have a huge backlog of drill ready prospects - with ALL the seismic allready done. Plus - there were numerous companies that couldn't pay, or cut deals for warrants as payment for seismic work - VTS has at least 2 such situations. The GOM Lease Sale endorses this as fact - that the E&P's allready have a near full slate of drill-ready projects and seismic is going to be a slow upturn here... Longterm - VTS is a great company; PGO has the FPSO business - a brilliant mgmt move - they could surprise... but, I would be very carefull of the MIND's, the IO's, the GGY's , the OMNI's etc.... nearterm; just much, much better prospects elsewhere.