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

To: Broken_Clock who wrote (55650)	11/30/1999 1:45:00 AM
From: IndioBlues	Read Replies (1) \| Respond to of 95453

You know Pap King, this selloff on PAA has been pretty severe and I am wonder if it might not be a bit overdone. My reasons: (1) We haven't heard anything yet as to whether the unauthorized trading losses might be covered to some extent by fidelity insurance policies; (2) The general partner is willing to toss in another $60+ million in additional capital if the lenders cut PAA a little slack; (3) PAA was attempting to sell the Cal-Tex pipeline even before this story broke. If a sale can be consummated on decent terms, that should provide more cash; and (4) You have to think that dividend (even if it has to be cut back for a time) will attract value/turnaround players. This is an intriguing play. If I hadn't recently had my ass handed to me on MDR (I'm in at a blended 11 3/8) I might just try to make a go for it. Heh heh

To: Broken_Clock who wrote (55650)	11/30/1999 9:19:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

Papaya - you are correctamundo on one major reason for the E&P softness... The price retreat on Nat Gas is the main factor and the secondary factor is the spindoctoring on "supply". Also, our old friend George - Mr. Gloom & Doom who has steadfastly remained the anit-christ to crude oil all through its doubling in price this year; is still thumping his tamborine & chanting his mantra - re: <<A special report on world crude oil production has been posted to the site, along with the Weekly Report on EIA Data. The analysis shows and undeniable trend toward overproduction, strongly suggesting foreign producers are currently swamped in crude oil they have not been able to sell. Look for significant changes in the price of crude oil! >> ... What is this guy smoking ? One could consume copious amounts of Peyote buttons, sit atop MT. Psychobabble for nights barking at the moon and still not see an "undeniable trend in over-production." - Over-production ? Has this guy just tuned out the Global recovery story, failed to notice what OPEC is doing and totally ignored domestic storage stats ? Actually that ole' George still has a following is a good thing. It helps keep the lid on valuations here while we have a complete separation from commodity prices and market fundamentals. These opportunities are very, very rare. Papaya; this quote from that post is what a decent percentage of the market place firmly believes: <<. He saw there was plenty of oil out there (at Cushing, Oklahoma, where Plains has large storage facilities) and thought there was no way world oil prices were going to go higher,' said an experienced oil trader, who didn't wanted to be quoted by name.>> But, that enough people believe this story; is the reason we have such opportunity with the valuations, especially those being presented by the crude leveraged E&P's here. Also,that quote presents a somewhat simplistic observation on a complex set of variables that determine crude prices. Storage levels are not allways indicative of production trends, nor are production trends allways the mirror of storage levels. There are a myriad of reasons for the ebb & flow of storage levels and Y2K and the price fluctuations of the commodity itself are just 2. Who would not want to buy all the cheap crude they could and keep storage tanks full; in a upward trending market. When crude was $18 & trending upward with the expectations of breaking into the $20's; it was simply good business to buy all the $18 crude that was still out on the market and to keep every storage facility possible filled with $18 crude vs. being faced to replace storage with $20-22 crude later. There are allways 2 sides to every trade. However; when one separates the commericals from the speculators; one can see the biased perspective of refiners & Oil Majors who have a vested financial interest in many cases to talk down the price of crude. ie: Shell's market shorts, the fiasco with Plains Rogue trader losing $160 M going short crude here etc. Time and time again; going against the grain, the spin doctors and staying focused on the most elementary of pricing fundamental stories;ie: rising Global & Domestic demand and reduced domestic & OPEC production; has been profitable. There are powerfull vested interests talking down the price of crude here. However; the real story is to ignore the hyperbole; we do not need $26 crude oil to support present shareprices here. $26 crude oil has not been priced into these stocks, nor have these E&P companies realized $26 crude oil. Remember during the dark days of $10 crude; when the Oil majors and the market agreed that with $16-$18 crude sustained, there would be a healthy stabilization of the Oilpatch and that these companies could return to profitability and the growth mode at those levels ! Well guess what; tune out the noise - $16-$18 sustained crude will support OSX 120ish ultimately. $20+ crude sustained will support 140ish OSX. We are in the OSX 70's here and the E&P's are priced at levels equal to OSX 60. Stay focused on the story, overweight the E&P's, $20+ sustained crude is here - the bubble thru $30 is still coming and it is is way, way too early to write off the Nat Gas story for Winter '99-'00. The valuations here are reflective of $15 crude and $1.90ish Nat Gas; how many times do we get to buy into valuation "spreads" with the actual market prices being outside the spread? This is the exact reverse of last winter. The market rallied on the unsustainability of $10 crude oil. PXD was a $15 stock last Oct for example; now with crude prices nearly doubled and a repaired balance sheet - the stock is nearly cut in half. Buy the shareprice to commodity price anomaly and trust the underlying fundamental story in crude oil and not all of the spindoctoring market noise... This is "the" window of opportunity here and the "SI poster pain indicator" is flashing bottoming forming here... Not a bad position to be in here; for those "few" who sold into the prior rally here - lots of places to put that cash back to work like UPR OEI PXD FST XTO VPI NBL etc... also; the individual opps like a 10% one day retrace in HOFF, and the retrace in select driller & service stocks like SII offer not only solid trading opps once again; but perhaps the final window to enter solid positions; just before the naysayers get finally laid to rest via OPEC maintaining compliance,storage falling and demand growing. The next leg up is going to be an experience. Go back and look at the legs of the 2nd half of '97 from OSX 85ish to OSX 140 in a spiraled spike; the spike from OSX 85 to 120 in early 1998 and the near overnight move we made this March-April from OSX 45 to 80. We've had numerous short-term spike of nearly 50% in the OSX in the past. Imho; the coiled spring nature of this market due to the separation of valuations from commodity prices and let alone the increased earnings capacity & efficiencies of these companies via their restructuring of late; has set the stage for an absolute coiled spring reaction shortly. We have enough non-believers & spin-doctoring naysayers in both the speculative & commerical markets, enough shareholders have been shaken out and there is enough short interest presently after this retrace; to set the stage for another 50% short term OSX run & "doubles" in many E&P's as well. The nose knows... I feel it, I smell it - it's coming. Buckle up; the next 2 quarters will be a time to remember. ... you too ankle biters - hop on for another free ride.