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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: The Perfect Hedge who wrote (3348)	11/20/1997 12:13:00 PM
From: Lucretius	Read Replies (2) \| Respond to of 95453

Basically, it goes like this. The producers are looking to replace depleted reserves. The only way to do that is to drill. There is a S & D problem in getting rigs. Hence dayrates go up. Prod aren't drilling today to turn on the pump tomorrow. They're drilling today to have reserves 3 and 4 years from now. Even if Iraq would come on-line tomorrow at full capacity (whcih it can't do because it doesn't have that kind of capacity right now. Sure the oil is in the ground but they don't have the infrastructure to get it out) the Prod would still be drilling as long as it was profitable. The numbers I'm hearing are anything above $10, w/ $16 currently budgeted. This is actually a very good sign that there are shorts out there from uneducated individuals. Sentiment has turned bearish enough that complete novices in the sector are shorting. This may indeed be the bottom. Looking forward to lots of covering. Go to go do some work. Good lUck! -Lucretius