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

To: The Perfect Hedge who wrote (8805)	1/20/1998 4:30:00 AM
From: JHR	Respond to of 95453

Barron's Roundtable. Jimmy Rogers who is usally pretty bearish on the CNBC visits is bullish the drillers in this weeks issue that has the first part of their annual 3 part roundtable. Others there also think oil will stay in the same trading range it has had for the last few years, i.e. $19.00 plus or minus $2.00.

To: The Perfect Hedge who wrote (8805)	1/20/1998 7:53:00 AM
From: Teddy	Read Replies (2) \| Respond to of 95453

GLM's COO in in The Wall Street Urinal again. i like this guy. Dow Jones Newswires -- January 19, 1998 Global Marine Not Worried About Lower Oil Prices By Michael Rieke HOUSTON (Dow Jones)--The recent decline in crude oil prices is a short-term event that won't have much impact on recent high earnings of offshore drilling companies, a top executive for Global Marine Inc. (GLM) said Monday. "I don't care about the next six months," Jack Ryan, president and chief operating officer of Global Marine, said in a press briefing. If oil prices stay lower than $17 a barrel and gas prices stay lower than $2 a million British thermal units, "I see a modest slowing in the next six months," he said. Oil prices have dropped because of four short-term factors, he said, naming the Southeast Asian financial crisis, higher OPEC quotas, El Nino and Iraqi oil in the market. Three of those factors aren't likely to last more than a year, Ryan predicted. OPEC recently raised its production quota, but the increases "just legitimized current production," Ryan said. Most OPEC countries, except Saudi Arabia and Kuwait, were already producing as much oil as they could and ignoring their quotas. The higher quotas simply "reflect reality," he said. The El Nino effect brought milder winter temperatures, limiting winter heating demand for oil and gas. That weather phenomenon will end soon and demand should return to normal, Ryan said. In fact, he said he'd be surprised if gas prices in the U.S. didn't surpass $3 per million British thermal units by the end of the year. Iraqi oil is liable to be off the market again soon because of Saddam Hussein's differences with the United Nations, Ryan said. The embargo won't be lifted until the year 2000, and then it will be lifted only because the world will need Iraqi oil to meet growing demand, he predicted. In Southeast Asia, if the economic crisis continues, it shouldn't have much impact on world oil demand, Ryan said. Southeast Asia uses only about 17 million barrels a day out of world oil demand of about 74 million b/d. If Southeast Asian demand is cut 4% to 8% because of an economic slowdown, it will have only a marginal effect on oil prices, Ryan said. "Everyone is worried about oil prices going down when they should be worrying about oil prices going up," he said. Higher prices would limit demand, he added. Customers of offshore drilling companies spent $85 billion last year. Global Marine's share of that business enabled the company to bring in revenues of $1.1 billion in 1997. According to industry surveys, capital expenditures for exploration and production should increase 10% in 1998, Ryan said. The offshore drilling industry is in much better shape today than it was 10 years ago when the oil industry was in the depths of a depression, he said. Ten years ago, 340 drilling rigs were idle, while only 52 are idle now. Of those 52 rigs, 42 are idle only because they are being readied for work. The other 10 can't be repaired. Day rates give an idea of the health of the offshore drilling industry, he said. The day rate for the latest semisubmersible rig in the North Sea is $165,000 a day, Ryan said. In 1995, the day rate for a semisubmersible was only $60,000 a day. Day rates for jackup rigs have gone from $18,000 a day to $80,000 a day in the last few years. -By Michael Rieke; 1-713-547-9207