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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: David Michaud who wrote (7379)	5/28/2000 10:07:00 AM
From: kingfisher	Respond to of 24940

Here is an excerpt from an interview with Joseph McNay Chairman and CEO of the $13.8 billion Essex Investment Management in Boston.Taken from this weeks Barron's. Mr.McNay is "very interested in Natural Gas Sector". Although Canadian companies are not mentioned I feel this article is significant because it continues to draw attention to this sector which still has reasonable upside for Canadian energy companies. .................................................. Interview, Part 2 Interview, Part 1 Q: What happened to that 10%? Where did it go? What are you looking at buying now? A: First of all, we have a reasonably big cash position of 20% for those accounts that allow us to raise cash. Secondly, we are always open to new areas where we feel there are bottom opportunities. One area we've already made a small foray into is energy. With higher oil prices, and much higher natural-gas prices, we felt oil-service companies would gradually see more business, and they've gone against the market. In particular, we selectively own Schlumberger, Smith International, BJ Services and Weatherford International. Also, natural-gas companies like Apache, and the E&P sector, exploration and production, such as Anadarko Petroleum, Burlington. Q: You sound like you have a bit of a conspiracist take on oil prices. A: I think they will fluctuate between $20 and $30 a barrel over the next two years. Sellers now control the market, whereas for 20 years the buyers controlled it. Sellers such as Saudi Arabia, Iran and Venezuela now determine the price. In my opinion, they are very smart and do not want to have the price too much over $30. They want to keep others from taking steps to either find oil or conserve use. Therefore, the price will be kept between $20 and $30. And when they need a little more money, they'll raise it to $30 or $32, which they've done twice in the last three months. Q: You are not long the oil stocks. A: We haven't been, but I wouldn't count that out. We've gone for specific beneficiaries, the exploration and production companies and the service companies. They've gone up 100% while the market has gone down 10%. And so I see it as a resting phase and a consolidation, one that, long term, is attractive. On a short-term basis, I'm very interested in the natural-gas sector. It's an industry that's consolidating and is becoming a more sought-after area. So we are finding a variety of beneficiaries of the movement toward deregulation, free enterprise and the benefits of the Internet or auction capability. Enron fits that very specifically. Also, we're long both Williams Communications Group and Williams Cos, which has provided the right-of-way for Williams Communication capabilities. It's a great way to play both telecom and natural gas. We bought into Williams probably between six months or a year before it sold [most of its network unit] to LDDS, which then merged with WorldCom. Then they used part of the proceeds to buy back their stock. And then we bought Williams Communications Group at the offering when it went public at $23 a share last October.