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.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (118455)	2/24/2001 1:45:39 AM
From: schrodingers_cat	Read Replies (2) \| Respond to of 164684

No rush Glenn, though if you are waiting for WH to admit his mistake I think that you will have lots of time for typing. <gg> Let me share some of what I have learned: Nice recent review: eia.doe.gov Reserves: Seems to be plenty of gas in the ground in the US , though some will dispute this. The energy information administration (EIA) has quite a bit on this here:http://www.eia.doe.gov/oiaf/aeo/issues.html#natgas So it seems that it is mainly a question of drilling enough new wells to meet demand. An important point to note is that according to EIA it takes 12 to 18 months to drill a new well and bring it into production. Big increases in production are likely on the way given that the number of rigs looking for gas surged last summer. I'm concerned that present gas prices are unsustainable for this reason and also because demand is turning out to be a lot more price sensitive than some had thought. For this reason I'm a little wary of some of the exploration and production companies (E+P s). Others may disagree strongly with this view. The two e+p I like best are Miller Drilling ( MND) and Cross Timbers Oil (XTO). Both are mostly gas producers and both have plans for 20% per year growth. MND in particular seems to have many prospects already lined up and a PE of about 11 IIRC . There is also the "gas in CA story" which is that because of pipeline shortages gas prices in CA have tended to be higher than the US price. There's a new field being developed there by a group of companies including Libbyt's ROYL and PYR. The reason I prefer the drillers is that even if gas prices come down many new holes will still have to be drilled and the drillers and other service companies should be busy. The largest land driller in the US is Nabors (NBR) and their chart looks nice IMO. The story here is that dayrates for rigs should rise and also that they have 150 mothballed rigs which they are going to try to restart. It seems that constructing a new well is quite a complex business and there is a lot more involved than just drilling it. "Pressure pumping" , "completion", "tubulars" , "wireline" and probably others are all different business segments involved in getting wells up and running. I like a company called BJ Services (BJS) which is in the "pressure pumping" business. I must also mention the big three of the oil service business: Schlumberger (SLB), Halliburton (HAL) and Baker Hughes ( BHI ). These are in the business segments I mentioned above and provide other things like drill bits and drillling fluids to the drillers. They don't seem to operate any drill rigs though. They are multi-national businesses and are not pure plays on the gas story in the US. Another way to play the gas story is the pipeline companies. I've seen El Paso Gas (EPG) recommended and know that they are one of the companies with a gas pipeline into CA. I think they are also involved in operating storage facilities which are used to help meet peaks in winter. Of course there is also ENE although they are into other things as well. Well, I'm fed up with typing so maybe I'll save some other ideas for a later post.