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

To: Tulvio Durand who wrote (7476)	1/10/1998 3:15:00 PM
From: Jeffrey Beckman	Read Replies (3) \| Respond to of 95453

Updated gory numbers. Price: Current PE : '98 Projected PE CDG; 38.25: 16.6: 8.7 MDCO; 15.43: 18.0: 9.0 GLM; 19.7: 9.9: 9.2 RDC; 24: 9.3: 9.4 ESV; 25.25: 20.9: 10.2 PDS; 17.81: 12.1; 8.1 KEG; 16.0: 17.9: 9 UTI; 15.68: 26.2; 10.4 PTEN; 24.28: 23.8; 10.5 GW; 4.06: NA: 14 SDC; 35.56: 25.7: 9.5 NE; 23.5: 13.8: 11.9 FLC; 26.87: 29.8: 12.3 DO; 40.68: 23.4: 12.4 RIG; 37.25: 38.1: 12.6 MIND; 14: 16.5: 9.1 EVI; 40.5: 14.2: 12.7 GIFI; 17: 15.8: 13.5 CXIPY; 42.75 : 97.4: 16.6 FGII; 22.75: 30.9: 19.8 HAL; 42.375: 28.0: 18.4 SLB; 69.75: N/A : 20.9 All based on Zach's numbers from Yahoo. Jeff

To: Tulvio Durand who wrote (7476)	1/11/1998 7:27:00 PM
From: pwrmstr	Read Replies (2) \| Respond to of 95453

Tulvio, I agree with your core of your argument that oil drillers should not be impacted by short-term price spot market price fluctuations. However, over the long-term the price of oil will have a huge impact on the drillers, and it something we need to keep an eye on. The lower the price, the less attractive E&P will look relative to acquisition of oil reserves through M&A. If the global oil supply/demand situation sill looks uncertain this summer, the major oil companies could easily easily slash their 1999 E&P budgets in a heartbeat which will put downward pressure on day rates and rig utilization. (This is a huge fear in the market, but I tend to think this risk is overestimated unless the Global economy enters a major recession.) With rig utilization up and some new rig construction occuring, Iraq shipping some oil, and OPEC having the "perception" of increasing production, there is a lot of stuff that appears to be increasing the supply of oil. With Asian demand dropping and a warm winter in the U.S., demand is dropping. Net-net we see a negative trend with current oil prices, and as we all know, many people tend to extrapolate both positive and negative trends too far. To be a bull in this sector (which I am) you have to believe that the short-term negative macro-fundamentals are going to correct themselves before lasting damage is done to the sector (i.e. lower E&P budgets). If and when this reveral occurs, market-sentiment will quickly change and we will be rewarded for our patience IMO. By the way, I see that you are a fellow JMAR and CSCO fan. I've been a big JMAR fan for a while, but I have had my patience tested. Ever visit their facilities in San Diego? Still hold the stock?