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

To: TheMajor who wrote (4182)	11/19/1997 8:02:00 PM
From: Kerm Yerman	Read Replies (4) \| Respond to of 24916

TM / Newport Petroleum Fall in share price to deep low is discouraging. The way I see it at this point, buying at $4.50 or less will provide a minimum of 50% return in 12 months. I also think the market over-reacted. I think we can expect this to be a pattern for many companies from now thru release of annual reports. I'm not so sure about near term price movement in Newport shares. I'm going to be a buyer, but I wll take my time here. In the meantime, my interest is in watching share movement of companies like Tethys Energy, Genesis Exploration and Vermilion Resources. Focus is also on those companies who have been exercising cost control over the past one to two years. They really have a head start on many of their peers and you won't see a strong negative impact on their share prices. These companies know how to grow within their restraints and capabilities. The day of the quick glance at cash flow has come to an end. One must now focus on growth statistics in terms of earnings, production, reserves, debt and finding costs as well. The underlying problem is the current trend in commodity prices. I think the uncertain aspects of future pricing trends are turning large investors off. Looks like a mirror image of late 1993 activity. Share prices dipped quite badly in last 4-5 months and financing was very difficult to obtain for lack of interest in the industry. Bottom line is, we must look for the companies who can grow via the drill-bit and cash flow they are generating. The day of free money to increase productivity is coming to an end. What we will see in terms of strong appreciation in shares over the next five months will be those companies with stories. Dangerous situations to be investing into. The majority of these will be companies operating in international territories. One must not throw caution into the wind when looking at these situations. There will be some successes in this area, but non-conclusive situations and failures will far outnumber those. Companies in the service sector are not to be overlooked. Shares in these companies are in a free fall. These same type companies in the states have been getting clobbered and I contribute this for the declining prices in Canada. Rather than focusing attention on Canadian companies and Canadian index type information, direct attention to these same areas in reards to activity in the states. As New York goes - Toronto will follow. That's it for now -- I got to rambling on again. As I said a week ago, hang on to your britches for this fall may yet go deeper. There is definitely a large extent of uncertainty regarding future direction in shares of oil and gas companies.