Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Crimson Ghost who wrote (54968)	11/17/1999 11:11:00 PM
From: Tomas	Respond to of 95453

Simmons & Company International has updated its drilling activity forecast through 2001. The revised outlook shows that the worldwide rig count (as measured by Baker Hughes Incorporated) bottomed in Q2'99, with North American drilling activity rebounding nicely in Q3'99. Strong growth is expected in this area through the forecast period rising from trough levels of 857 rigs in 1999 (Q2'99 average was 648 rigs) to over 1,200 rigs in 2001, an increase of 42%. Outside of North America, drilling activity continued to slide to an all-time low in the month of August. A slight recovery is anticipated through the balance of 1999 in this area, but strong increases are not foreseen until 2000. Even with improvements in activity through the balance of 1999, drilling activity for the year will be down sharply compared to 1998. The forecast shows worldwide drilling activity will be down 21% year/year in 1999 to 1,452 rigs. Global activity is expected to grow by 20% to 1,744 rigs in 2000 driven by significantly greater activity in Canada and the U.S. The outlook for 2001 is for 1,970 active rigs, up another 11% year/year. These increased levels of activity correspond with the Simmons E&P capex growth assumption, i.e., +15% per year in 2000 and 2001. Although activity is forecast to be up 20% on 15% greater E&P spending in 2000, this makes sense when one considers that the greater activity level is predominantly associated with lower revenue per rig opportunities, namely US land and Canada. On the other hand, the up 11% activity on 15% greater spending in 2001 is predominantly associated with higher revenue per rig opportunities, international land and offshore. US Comments: Despite the nice rebound in land drilling thus far in 1999 and the outlook for continued improvements through 1999, US land drilling is projected to be down 28% year/year to 495 rigs. This is forecast to increase to 665 rigs in 2000 (+34% year/year) and to 750 rigs in 2001(+13% year/year). Offshore drilling is projected to be 16% lower in 1999 than in 1998. This is expected to pick up 15% in 2000 and another 13% in 2001. This corresponds to 104, 120 and 135 rigs, respectively. Inland waters drilling is projected to fall by 28% in 1999, then pick up 26% in 2000 and another 22% in 2001. On a rig count basis, this corresponds to 16, 21 and 25 rigs. In total, the outlook for 2001 is an average drilling rig count in the US of 910 rigs, which is just 4% lower than the 1997 average of 944 rigs. Canada Comments: A strong winter drilling season in 1999-2000 is expected, thus the outlook for Q1'00 is for 403 rigs. A lower year/year impact of spring breakup is expected in Q2'00. Last year, the Q2 average was 125 rigs. The forecast is 150 rigs. Spring breakup is always a wild card for Canada. In summary, the forecast is for drilling activity to be 7% lower in 1999 versus 1998, increasing by 16%in 2000 and by another 8% in 2001, which corresponds to 242, 281 and 305 rigs. There is room for some upside surprises in Canada over the next couple of years (for information purposes, the average active rig count in Canada for 1997 was 365 rigs). International Comments: This market will remain weak through the balance of 1999. Q4'99 is forecast to be up 3 rigs versus Q3'99 (582 rigs versus 579). Note that this is up 25 rigs from the most recent two months of international data, which was reported to be 557 rigs. Offshore will continue to be weak (down 3 rigs or so), but these should be a modest recovery in land drilling (driven by Latin America increases). In total, drilling activity is projected to be down 21% year/year in 1999 compared to 1998, and up 11% in 2000 with another 15% in 2001. Land drilling is projected to be down 20%, up 11% and up another 12% for the same comparative years. Offshore drilling is expected to be down 25%, up 11% and up another 20%. simmonsco-intl.com

To: Crimson Ghost who wrote (54968)	11/18/1999 5:17:00 AM
From: Roebear	Read Replies (1) \| Respond to of 95453

George, OT Bingo! The NDX cannot gain 23% every month and even our beloved OSX will not go up forever! I can think of a few likely scenarios where inflation could blossom next year initiating a more fundamentally friendly environment for gold. This could be the spring to spring into gold and you know I like to be a little early rather than a lot late. Besides, looking at that large inverse head and shoulder on the XAU is all the endorsement I need for initiating a position in a good gold stock like AEM. What kind of goldbug am I if I don't have a little gold stock for Y2K; shoot, they'd revoke my membership card! VBG Roebear