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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (13808)	11/9/1997 7:14:00 PM
From: Nancy	Respond to of 50167

Judy, Read your previous post on general market view - couldn't agree with more. A good bottom has to be set in but the big issue is where might be the bottom. Drillers - OK, these guys go drill the wells, be it a testing well or a production wells - after they finish their jobs, they MOVE to another location - but the platform - is where the gas/oil getting pumped, 24 hours/day, 7/days week, and transported thru pipes to processing plants, etc. And that is those whose operations rely heavily on computerized functions. (doesn't mean drilling a well doesn't need computer, but the degree is much less). In other words, drillers come in, drill the wells for the Exporation/Production companies, like XON, TX, etc. after their jobs done, they move onto another projects, another contracts. The E&P companies have permanent platforms put in to PRODUCE the gas/oil - for example, FGII IS NOT A DRILLER, it is a builder of both rigs and platforms. UFAB is a builder of platforms. Now FGII went to 46-47 is like MAVK went to 50ish. Totally unjustified. Most of those you are familiar with, are drillers. then, there are those supply mud pumps, turning tables, etc. etc. the "tools" to do the job ... and those provide other services, (like BJS, HAL, SLB, etc.) and those provide transportation and support vessels, like TDW, TMAR ... The whole thing is loosely separated into 2 parts, drillers and field services - within field services, there are several subsets. The way I see it, the activities will not slow down, but the stock prices will come down with the whole market, simply they have gone ahead of themselves - but their fundamentals are far stronger than semi/semi equipments - can semi equipment industry claims its orders are booked thru 1999 ? with rates all fixed, and capacity being used up to 95% ? I dont think so. But most drillers capacities in North Sea, Africa are booked up to 95%, Asia up to 85-90%, US up to 90% - when Philip talked about them being cyclical, he is right on cyclical part but he doesn't see how long the cycle is - that is the part they are very different from semi equipment. Energy cycle is much longer than other capital equipment sectors. I dont see why you said activities will slow down next year. The major concerns drillers have now is they could not find enough qualified staff to man the rigs. Monday's IBD has an excellent Industry Snapshot on Drillers and also has an excellent article on NOI, in their New America Section. NOI is not a driller, but a machinery producer/distribor.

To: Judy who wrote (13808)	11/9/1997 7:25:00 PM
From: Snowshoe	Respond to of 50167

Judy, this Y2K problem is fascinating. TT recently inquired about a discrepancy in the margin position in his Schwab account. They discovered that their software was not handling his Y2K LEAPS properly! A few years ago my state government's central data center was shut down on New Year's Eve for 12 hours as part of a planned maintenance operation that went awry. This created a serious (although comical) crisis for jails all over the state, when they ran out of room in the holding tanks for drunks they could not process and release until the computer came back up. Imagine the kind of things going wrong on a planetary scale on Y2K New Year's Eve, when a lot of folks will be pretty well lubricated! As a veteran programmer, I suspect that a number of important fixes will be overlooked... As for the oil production platforms, it sounds like Y2K problems will create new business to retrofit existing offshore platforms (not to mention refineries and pipelines). In fact I think I'll make some local inquiries about TAPS. The question is, will there be a net positive or negative effect for oilfield services and equipment suppliers? Will new projects be curtailed to concentrate on retrofitting, or sped up for completion before Y2K?