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

To: Thean who wrote (5301)	12/15/1997 9:40:00 PM
From: sand wedge	Respond to of 95453

Thean, I checked Second Choice on your camps. Every one of these stocks comes up oversold except PDE.

To: Thean who wrote (5301)	12/15/1997 9:57:00 PM
From: Bill Li	Respond to of 95453

Thean, thank you for the analysis. Today's sell-off, according to Morgan Stanley, is due to investors' concern over next year's budget spending after the three majors disclosed their budget plans. They believe that industry spending will rise by 15% at least next year. While some of the majors - Shell US and Phillips for example - apparently plan to hold spending flat, most have seemed to have planned for 10% plus increases. In addition, many of the national oil companies plan to increase spending significantly in coming years. Late last week, Exxon also released some preliminary figures with respect to 1998 capital expenditures. The company intends to increase total capital expenditures by roughly 10%. DJL analysts today said that investors may be overreacting to budget announcements by the major oil companies, since these companies were not the primary driver for the mid-to-high teens spending growth in 1997. They think we'll see further volatility in the group near-term till some of these issues clear up better. However, they continue to believe in the longer term thesis for the group which is based on demand growth, production declines from older fields and the increasing use of technology. Consequently, they recommend that investors use the sell-off to selectively buy those companies that have the best internally generated earnings growth prospects. Good luck everyone. Bill

To: Thean who wrote (5301)	12/15/1997 9:58:00 PM
From: Big Dog	Read Replies (4) \| Respond to of 95453

Thean -- The drillers could give a hoot about whether the oil companies are making money or not. They will suck every last dime out of the oil companies as long as they can. It is a text book case of supply and demand...only the demand is inelastic since it doesn't matter how much you charge, it won't diminish the demand. The drillers have a memory. They remember in the 80's when the industry was decimated. When day rates for jackups in the US Gulf were 8000 or 9000 a day -- below direct operatiing costs of about 12,000 a day (this does not include any capital costs, just labor and fuel). The oil companies did not give a crap about the financial disaster they were forcing on the drillers. This caused a lot of rigs to go without needed repairs and put a lot of people out of work. Basically the oil companies were not paying anywhere near a "fair" price and they (the oil companies) were loving it. Well now the tide has turned. And the same guys theat ran those drilling companies then, run those drilling companies today. I bet they are smiling from ear to ear being able to stick it to the oil companies...so don't EVER think the driller will cut the oil companies ANY slack as long as the rig demand is strong. Oil companies have set themselves up as the enemy long ago. They chose to do the wrong things to a lot of people thinking they were smart. They were stupid and still are stupid. They are generally bureaucrats that don't have any sense of reality. They are up against the most entrepeneurial group of business men in the world -- the drillers. Guess who will win? The oil company guys that make these rig decisions have never risked a dollar in their entire lives and now their companies are paying for the short sightedness of 10 years ago. Right now the drillers have 'em by the gonads and they are squeezing tight. There are too many oil companies with huge dollars ready to snap up any rig that another oil company doesn't want -- instantly. Until this changes -- and there are only signs of it INCREASING -- this sector will outperform any asset class in the world. Bar none. Just hold on to your britches and watch the show. (Would you say I am bullish?)

To: Thean who wrote (5301)	12/15/1997 11:04:00 PM
From: chuck weir	Respond to of 95453

Should you pass....call the bet...raise? Feels like the last card is about to be dealt and there only 3 players left with chips....and there is a ton of money on the table. Time to play the cards, put your money on the table, or walk away. The index of 29 drillers shows a great 5-wave Elliott pattern being completed (from the October 10th highs). As Thean points out, the rest of the tech stuff is within a hair of supporting/confirming the Elliott wave analysis. Fundamentals? 1998 P/E's of 10 -12 seem like a bargain? I think I will get my 4th ace and beat the potential straight flush on my left.

To: Thean who wrote (5301)	12/16/1997 12:46:00 AM
From: Czechsinthemail	Read Replies (1) \| Respond to of 95453

Thean, Thanks for your detailed post. I think there is a good chance for a rally, simply because the sector is so heavily oversold, but I have much less confidence in my short term predictions than in my big picture forecasts. As for the e&p budgets, I think they remain strong. You may recall the Chevron exec saying that drilling dayrates amount to pennies in the overall picture of their exploration budget. As long as the rig situation is tight and their is overall profitability on the drilling, they will keep it up. I think the problem is that many investors, including fund managers, ASSUME that the higher dayrates will be prohibitively costly and will deter drilling. I think the only thing that will result in a significant cutback of drilling is the prospect of significantly lower oil & gas prices for a prolonged period of time. So far there is no indication of that, so drilling continues and dayrates remain strong. Baird

To: Thean who wrote (5301)	12/16/1997 8:33:00 PM
From: Thean	Read Replies (1) \| Respond to of 95453

Below is a table showing the symbol, the lower BB today and the percentage gain/loss today. We have most drillers (except PDE, KEG, SDC, VRC) still stuck below the lower BB's, everyone is above their respective lower BB's. This is a good sign. However, if we close with another good gain tomorrow, then we are sure we are not going to ride the lower BB lower going forward. Camp A - those closed below the lower BB on 12/15. MDCO (19) +6.4 DO (43) +7.6 GLM (24) +10.0 RDC (30.5) + 6.6 NBR (32) + 6.4 PDE (23) + 0.3 PKD (11.75) + 5.4 EVI (41.5) + 7.9 ESV (32) + 5.3 KEG (20.5) + 1.9 SDC (37) + 0.0 VRC (20) - 0.6 Camp B - those closed at or near the lower BB 12/15. FLC (30) + 4.5 UTI (25) + 1.0 RIG (43.5) + 5.3 NE (28) + 4.0 CDG (49.5) + 3.7 RON (55.5) + 1.6 FGII (28.5) + 7.3 Camp C - those closed above the lower BB 12/15. PDS (22.5) + 0.3 BDI (16.25) - 0.8 GW (5.75) + 1.0 PTEN (33.5) + 2.7 MAVK (25.5) + 5.6 MIND (16.5) +18.0 Note: the land drillers (other than NBR and PKD) did not show strong recovery near the end. I don't expect them to underperform tomorrow but if they do, then we are seeing people buying for lesser risk versus bigger gain potential.