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

To: Big Dog who wrote (7605)	1/12/1998 8:53:00 AM
From: Teddy	Respond to of 95453

Thanks Mike, great article. Here's a snip that cought my eye: "Another significant bet on long-term industry fundamentals was the series of announcements, beginning last spring, of construction contracts for major rigs, each worth as much as $250 million. Industry estimates calculate current rig orders of all sizes at yards all around the world to be in the neighborhood of 50; current projections foresee as many as 500 rigs being built before the current cycle runs its course. Big rigs tend to be built with five-year contracts in place and their construction requires at least two years. "Orders to construct new deep-water rigs," says Charles Burrell, sales manager at a Gulf Coast shipyard, "tells me the oil companies are saying (that) for at least the next seven years, everything looks rosy." The situation could be even rosier than industry experts predict. Because of the eroded infrastructure of engineering skills, construction yards and skilled labor, Matt Simmons, president of Simmons & Co., believes the industry will do well to deliver 20 major rigs in the next five years. With demand already high and industry mothballing 15 to 20 outdated or nonfunctional drilling rigs a year, Simmons says anyone concerned that announcements of new construction will undermine the current demand/supply balance is simply "out of touch with reality."