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

To: CommanderCricket who wrote (58878)	1/21/2000 9:53:00 PM
From: dmccoach	Respond to of 95453

CommanderCricket, Yes OEI has "moved off the bottom", but I think its potential is just being uncovered. (Disclaimer - I do own shares.) Also, Valueline analysis of OEI ranks the company at a 2 for timeliness (above average), 3 for safety (average) and 1 for technical potential (excellent - and is a ranking of expected share appreciation potential at this time). The Valueline analysis is as follows (no link for this, I pay for and receive the survey monthly): Company?s Financial Strength B Stock's Price Stability 25 Price Growth Persistence 25 BUSINESS: Ocean Energy, Inc. is the successor to Seagull Energy Corp., which is represented by these statistics prior to their 3/30/99 merger. Explores for and produces oil and natural gas, chiefly in the United States, also in Egypt, Russia, Indonesia, Cote d'Ivoire, and Equatorial Guinea. In Nov. ?99, sold its gas distribution utility in Alaska. 12/98 reserves: gas, 1,829 bill. cu. ft.; crude liquids, 191 mill. barrels. ?98 production: gas, 623 million cu. ft. per day; crude oil & gas liquids, 83,540 barrels per day. Est?d 12/98 oil & gas pretax present value: $1.7 bill. Has 1,600 empls., 4,330 shareholders. Officers & Dirs. hold 8% of stock (2/99 proxy). Chrmn.: J.C. Flores. Pres. & C.E.O.: J.T. Hackett. Incorp.: Texas. Address: 1001 Fannin St., Houston, TX 77002-6714. Tel.: 713-951-6000. ------------------------------------------------------------ Investor caution has prevailed over optimism about Ocean Energy lately. Following a near-tripling in price earlier this year, the shares have retreated nearly 40% from the 1999 peak. A possible cause of the pullback was the October announcement of a well abandonment in Cote d?Ivoire, Africa. Ocean Energy's investment in the 11,785-foot hole was something under $1 million. Though this is not an insignificant sum in total, it's less than a penny a share, and is a normal kind of exploration and production expense. Overall, the company?s success rate in 277 well participations over nine months was 78%. For exploratory wells, it scored 61%. Rising oil and gas prices helped third-quarter income to beat expectations. Results recovered to a $0.16-a-share profit, from a loss of $0.35 a share (for Seagull Energy) the year before. Typical of the increases in most regions, Ocean;s average domestic prices last quarter were up year to year, for oil and gas liquids by 57%, and for natural gas by 29%. Because the company conservatively uses hedging activities, the effective increase in U.S. crude liquids prices was capped at 21%. A continued rise in selling prices since September suggests an even better outcome for the final three months of 1999. An aggressive drilling program is enlarging deliverability for next year. Most current production comes from mature domestic properties. The growth focus is on the Gulf of Mexico and overseas. Output increases are planned from projects under way this year in Equatorial Guinea, Egypt, and offshore Pakistan. Proceeds from asset disposals are enabling the rapid repayment of debt. Besides selling the ENSTAR gas distribution business for $290 million last month, the company has culled away less-suitable assets in the Arkoma Basin and Gulf of Mexico for proceeds of $291 million. The stock may prove a rewarding speculation for venturesome investors. The merger of Seagull Energy with Ocean Energy appears to be working out well. Although risky, the shares are a timely commitment for the year ahead, based on current earnings momentum. They offer the possibility of sizable price appreciation in the next 3 to 5 years. Edmund B. Swort, CFA December 24, 1999