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

To: Tomas who wrote (51145)	9/15/1999 8:22:00 AM
From: oilbabe	Respond to of 95453

Mobil-Exxon-Elf Group Finds Large Gas Deposit in Peru Jungle, Govt Says Mobil-Exxon-Elf Group Finds Large Gas Deposit in Peru Jungle Lima, Sept. 15 (Bloomberg) -- Peru said a group led by Mobil Corp. discovered about two trillion cubic feet of natural gas in a block of Amazon jungle, which could boost the country's current output by almost a third. The group, which includes Exxon Corp. and France's Elf Aquitaine SA, made the discovery after drilling just one exploratory well in the area known as Block 78. The government said the oil companies are currently analyzing results and pushing ahead with further exploration to determine if development would be economically viable. ``The possibilities are tremendous,' said Miguel Celi, general manager of Perupetro, the government regulator of the oil and gas industry. ``We are very anxious to find out what additional exploration will reveal in this zone.' Government officials said preliminary results indicate reserves that would yield about 10 million cubic feet of gas a day, which would be a 30 percent increase over Peru's July daily production of 35 million cubic feet. This discovery represents the country's second-largest known gas reserve after the undeveloped Camisea deposit, which has 13 trillion cubic feet in reserves. None of the companies would comment on the find. The group has the exploration contract to the enormous 5,780 square-mile tract in southeaster Peru until 2003, yet could begin development before if deemed appropriate. However, infrastructure is lacking in the remote zone, so development costs would be substantial. The exploratory well lies in the environmentally sensitive Candamo valley in southeastern Peru. The valley is a 350,000 acre watershed that is considered to be one of the most biologically diverse areas in the country, and its preservation is paramount to international environmental groups. Mobil is the operator of the group with 33.4 percent stake in the project, with the remaining share split evenly between Exxon and Elf. --------------------------------------------------------------------------------

To: Tomas who wrote (51145)	9/15/1999 8:28:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Barrons Online article vs. Globe & Mail.... The "Barrons Online Article posted earlier paints the OSX stocks as being ahead of the fundamentals here (nahhh - whodathunkit ?) and maybe a bit pricey, seeing insider selling,selling at historically fully valued PE ratio's etc... Then the "Globe & Mail" article talks about there "still being time to catch the Oilpatch train"... Who's right ? ...they both are. Barrons article was speaking mainly to the driller & service stocks and the Globe & Mail was speaking the the Canadian E&P companies. That has been my entire point here of late. Only one subsector (E&P's) is driven by better fundamentals. Higher earnings, cash flow, production, revenue etc. Only one subsector is guaranteed that they "will" receive the benefit of higher commodity prices here - the E&P's; and in fact they gain the entire benefit of higher commodity prices and they receive it immediately. The E&P's control their own destiny here; the same can not be said for the driller & service stocks; who entirelly depend on rising Cap Ex spending from the Oil Majors & Independant E&P's. The E&P's are also in a 2nd phase of rising valuations. The top tier large caps have been nearly fairly valued here. The Street then starts looking to the 2nd tier mid & small cap companies; and for those looking for the ultimate in upside - there are still many micro caps who are under the Institutional radar screens because of market cap, share prices or other Institutional Fund ownership parameters. Another major benefit to the E&P's here is the ability to entirely eliminate the OPEC factor. The domestic pure play Nat Gas E&P's offer perhaps the best of both worlds. Control of their own destiny, the immediate fundamental & financial benefit of rising commodity prices and they are not affected by anything OPEC does, or does not do. Per the post on CHK's CEOs comments of expecting his companies stock to triple in the next few quarters, to the comments of XTO's CEO Bob Simpson - on pounding the table that his companies stock is exploding fundamentally and yet his stock is being valued at the bottom of historic valuation multiples; - there is incredible value, momenteum and strongly rising present fundamentals in the E&P sector - especially in the mid & small cap arena. While the Street is now experiencing yet another valuation tug-of-war on the Driller & Service companies; the E&P's are turning the corner fundamentally and will soon have the wind of analyst upgrades, upside earnings surprises and year over year quarterly increases in earnings, cash flow, revenue and commodity pricing in their sails. Q3 reporting will show very little, if any upside surprise for the driller & service stocks. Actually the opposite is expected, as analysts are lowering estimates for many companies presently. While no one discounts the upside potential for driller & service stock for those who are mid, or longterm oriented and there is no reason what so ever, to sell here. The nearterm upside as compared to the E&P's is the entire point. The driller & service stocks time will come; the "sweetspot" for owning/trading them is not here as yet, but it will be. The opportunity to be in the "sweetspot" of the E&P's here and to potentially have the near blessing of perfect timing to be able to potentially be able to "take profits" at the peak of winter heating season; and then to be able to rotate those profits back into driller & service stocks - right at the inflection point of their fundamental turn; is an opportunity rarely seen. E&P's, be there, think small ... and Go Gas !