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

To: HH who wrote (6951)	1/7/1998 6:48:00 PM
From: Teddy	Respond to of 95453

From The Wall Street Urinal (they could have gotten this information just by reading this thread) Oil, Gas E&P Spending To Rise 10.9% In '98, Survey Says NEW YORK (Dow Jones)--Worldwide exploration and production spending by oil and natural-gas companies is expected to rise 10.9% this year, according to a closely watched annual survey conducted by Salomon Smith Barney Inc. The 202 companies surveyed plan to spend a total of $93.8 billion on exploration and production worldwide this year. The projected increase in exploration and production, or E&P, spending in 1998 follows an increase of 18.7% in 1997, the biggest increase in the 16 years of the survey (the survey was conducted by Salomon Brothers Inc. before the recent merger with Smith Barney Inc.). Such an increase would mark the third-consecutive year of double-digit increases for E&P spending. Industrywide spending in the U.S. is set to rise just 6.1% to $29 billion, following a 20.7% surge in 1997, which was a survey record. Spending in Canada is slated to rise 6.7%; and spending outside North America is set to rise 14.4%. Despite the international bias, a majority of companies overwhelmingly named the Gulf of Mexico as the region offering the greatest exploration potential in the world. Among the biggest U.S. oil companies, Exxon Corp. (XON), plans to increase E&P spending 9.8% to $5.34 billion; Mobil Corp. (MOB) plans to increase E&P spending 4% to $3.85 billion; and Chevron Corp. (CHV) plans to increase E&P spending 15% to $3.8 billion. The survey is conducted by Salomon Smith Barney's oil-services analysts, because spending by oil and gas companies is what generates business for the oil-services companies that provide the rigs, drill bits, geological surveys and other oilfield support. An increase in drilling activity has spurred a three-year rally in oil-services profits and stock prices; drilling contractors were the best performing Dow Jones industry group in 1996. And, the survey found, the sustained strength in demand has caused a record number of companies to worry about shortages of oilfield equipment and personnel. But the industry's stock-market rally stalled in November, when a drop of more than 10% in oil and gas prices led to a dramatic tumble in oil-services stocks. For instance, shares of industry bellwether Schlumgerger Ltd. (SLB) rose to a 52-week high of 94 7/16 on Nov. 5, representing an 87% rise for the year to date adjusted for a 2-for-1 stock split in July, but have since fallen more than 25%. With oil prices currently around $17 a barrel and gas prices at around $2.15 per thousand cubic feet, many are worried that E&P spending may slow, hurting oil-service profits. Companies in the survey are setting their spending plans based on oil prices of $19.67 a barrel and gas prices at $2.19 per thousand cubic feet. The survey found, however, that oil would have to fall to $16.10 and gas would have to fall to $1.76 for a sustained period of time before companies cut their E&P spending plans. Salomon analysts said the survey's results confirmed their view that growth continues for the oil-services industry. -By Loren Fox; 201-938-5267; loren.fox@cor.dowjones.com

To: HH who wrote (6951)	1/7/1998 9:04:00 PM
From: John Carpenter	Read Replies (1) \| Respond to of 95453

The volume for driller/energy service issues was truly enormous/significant. Buyers of some size/clout/magnitude have entered near these price levels. The trading activity had the feel of a turning point/turnaround of significance. To repeat, today's volume was truly outstanding, occuring at a critical juncture. I believe that Fadel Gheit, the Farenstock energy analyst will prove to be prescient-namely that today's action in the drillers will pressage the formation of a bottom in crude prices and the reemergence of the energy services sector as the sector of choice. 1998 should be an exciting year of acquisitions/consolidations. Glen Dickerson has good instincts, having never physically seen me-only having my thoughts/writings to go by. Lucretius undoubtedly/unequivocally looks better in a skirt than I do.