Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: AL R who wrote (4407)	1/6/1998 3:33:00 PM
From: Richard Saunders	Read Replies (1) \| Respond to of 24927

AL/ Glad you picked up on the one week drop of rigs for week ended Jan. 2. I too blinked when I saw the "down 125" however put it aside to check out in a week's time. You mentioned impact of warm weather on winter access locations - one situation I've been monitoring is dependent upon ice-bridge access and it would seem they've been delayed by approx. 1 month. Drilling was expected to commence Dec. 15 but is now estimated to commence Jan. 17. As you point out, this may have contributed to lower utilizations on some of the soggy areas. Cold weather has since returned with a vengence and I'm sure most areas have been solidly frozen in for winter programs. The other reason re: lower rig use may be the Christmas break. The week surveyed included Christmas Day and it's purely a hunch but I suspect a bunch of rig workers were busy playing Santa Claus with their families or taking some quick R&R time on some Mexican beaches. It will be interesting (imo) to watch the numbers that appear for the next couple of weeks..........

To: AL R who wrote (4407)	1/7/1998 12:34:00 PM
From: SofaSpud	Read Replies (1) \| Respond to of 24927

AL R / Prudential I started looking at Prudential late last summer because a broker was giving me the very hard sell on it (I did not, however, establish a position). Don't know if you saw the report that RBC DS did on the company (dated August 30 or Sept. 1, if I recall correctly) -- very thorough and very glowing. At the time the shares were about $49, or a tick over $16 post-split equiv. Close yesterday was $13.40. Anything fundamental changed? Not that I can tell. Management is still there. Company still has no debt. They are still very exposed to OCTG. Now maybe the price was bid up to $90 on the assumption that there would be 20,000 wells drilled in 1998, but did anyone really believe that? The fact is that DS put a 12 month $90 target on the co. without anything like that kind of heroic assumption. Let's say the industry drilled 14,000 wells in 1997. Even with the current situation, there are still contracts to fill, and new pools are declining by more than one quarter in the first year. Barring a total gas price collapse, it would seem like a naive forecast of "more of the same", i.e. 14,000 wells in 1998, would be an OK starting point. At that level, PTS should have very respectable earnings. If you could ignore the market, the company would be an attractive buy on the basis of value right now. The problem is that you can't ignore the market, and the market can ignore value for quite a while. For now I'm keeping my powder dry. JMHO, FWIW