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

To: AltLar who wrote (4072)	12/1/1997 2:38:00 PM
From: Bill Morel	Respond to of 95453

If the oil price goes down, consumption will rise and therefore oil reserves will decline. If oil reserves decline, there is a need for MORE drilling and exploration. I don't think the spot price makes a big impact on the oil majors' two to five year plans with the fundamentals of rising consumption worldwide (think of all those Boeing and Airbus backlogs, all those 4-wheel drive SUVs, all those chinese and indians buying cars.) Anyone in the industry care to comment? Specifically, it would be good to know the levels of worldwide reserves, and what levels of reserves cause the majors to start exploration projects. It seems to me that these exploration programs are long term propositions and the actual STRONG EARNINGS of these companies are virtually guaranteed for at least the next two and a half years. For what its worth, Merril Lynch is still bullish on the sector. If there are massive land based reserves yet to be exploited, then I would think that this would be bearish for the offshore drillers.