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

To: Think4Yourself who wrote (64804)	4/17/2000 3:42:00 PM
From: jim_p	Respond to of 95453

JPQ, Soon the balance sheets will be repaired. In addition, the capital markets will once again open up. Where are they going to put their cash flow once the balance sheets are repaired? Jim

To: Think4Yourself who wrote (64804)	4/17/2000 3:43:00 PM
From: Think4Yourself	Respond to of 95453

Sky-high crude prices to lift oil company profits (see comments at end - interesting (JQP)) By Paul Thomasch NEW YORK, April 17 (Reuters) - U.S. oil companies are expected to report rosy first-quarter profits over the coming weeks, thanks to a rally which saw crude oil prices top $30 a barrel for the first time in almost a decade. Leading companies -- including Exxon Mobil Corp. (NYSE:XOM - news), Chevron Corp. (NYSE:CHV - news), and Texaco Inc. (NYSE:TX - news) -- are likely to see profits at least double in the quarter ended March 31, analysts said. ``The first quarter is going to be another excellent earnings period for oil companies, primarily driven by strong commodity prices you've seen in oil and gas,' said Paul Cheng, analyst at Lehman Brothers. Even while oil companies are set to enjoy strong results, however, their stock prices have barely budged in the last year. The Standard & Poor's index of international oil companies is up only 5 percent since this time a year ago. Michael Young, an analyst with Deutsche Banc Alex. Brown, said not only will earnings be sharply higher than they were a year ago because of ``phenomenal' crude prices, but will also beat the big profits they posted in the fourth-quarter. Soaring crude oil prices are largely due to an agreement by the oil producing countries including members of the Organisation of Petroleum Exporting Countries (OPEC) to cut production, a move which took crude prices from $11.00 to more than $34.00 a barrel in little more than a year. OPEC reversed course late last month, raising production in part because of calls by the U.S. government for cheaper oil. Still, crude oil prices continue to hover near $25 a barrel and show no sign of falling anywhere near the lows they hit early last year when they devastated oil company earnings. Amerada Hess Corp. (NYSE:AHC - news), for instance, earned just 7 cents a share in the first quarter of 1999, compared to consensus estimates of some $2.21 a share for the first-quarter of this year, according to data compiled by First Call/Thomson Financial. And Hess is not alone. On the whole, oil companies should see earnings rise by about 170 percent for the quarter, analysts said. Cheng said they could be even stronger down the road. ``We are looking for even a stronger earnings in the second quarter,' he said. ``Refining and marketing profit margins should pick up substantially, more than offsetting any decline in crude oil prices.' For the moment, however, refining and marketing will remain a sore point with oil companies in this quarter. Even with some recovery in refining margins in the United States and Asia, prices for fuels such as gasoline and heating oil have failed to keep pace with the rapid rise in crude oil. Salomon Smith Barney analyst Paul Ting said in a recent report that the chemical side of the business could also hurt oil companies, although he added that overall results could be some of the strongest in recent memory. While the industry is almost assured of posting strong results, it remains to be seen what will be done with all of the extra cash. Deutsche Banc.Alex Brown's Young said companies will probably funnel some of their excess cash flow into paying down debt, but added that if share prices continue to languish they may start buying back stock.