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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (1730)	3/16/2001 8:05:28 AM
From: Second_Titan	Read Replies (1) \| Respond to of 23153

Raymond Several have repeated over and over that buy & hold in the patch is not the most profitable way to invest in the patch. I have learned this over the last year and I have traded larger % of my portfolio on the long and short side. During this Spring and Fall demand for NG & Crude products falls. As supply increases and demand decreases the price for the products fall. Pretty basic economics. The only factor that keeps my unbridled optimism in check is a major slowdown in the global economy. If world demand for crude only increases by 1 MBPD this year or even stays flat, over the next 2 years the patch will be in fat city. With OECD storage levels the way they are OPEC would have to screw up big time in order to tank crude prices in the face of present demand. Depending on typical valuation multiples investors are willing to pay, most of the patch stocks are fairly valued of forward 12 month EPS in a range of say OSX 120 -135. The incremental increase in RIG use is hitting service rates and the deepwater assets need to come online. Over the next 1-2 years, the service rates will rise and unused RIGS will be placed into service in the deepwater. This will be what puts OSX 165 - 200. Simmons put out allot of material, review his June 26, 2000 report on underground storage. I am 50% cash now and short maybe 20% in the patch. I hope for the scare of a life time as non believers cash in their patch stocks because product prices are dropping during low seasonal demand. I will stay will unhedged NA gas producers, and crude plays. I guess deemphasize foreign NG assets. But the real money will be made in OSX, but it is not for the faint of heart. If you need any materials from Lehman on specific equities let me know. They just released a new report on E&P's.