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

To: Ken Robbins who wrote (11314)	2/11/1998 1:38:00 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 95453

Ken, While weakening crude prices don't look great, the sector's ability to stay pretty firm while crude drops is encouraging. Though I think there may be some short term downside if crude continues to weaken, the drilling companies seem to be drawing some attention as value plays and may be uncoupling somewhat from crude prices. I've been increasing the relative proportion of RIG to shallower drillers in my portfolio. The deepest drillers should have the best relative strength if oil prices continue to weaken both because their contracts have longer duration and because the economics of the ultra deep drilling is more favorable at lower oil prices. Since I think they also have the best long term forecast, there is a double benefit. If we get indications of a strengthening oil market, shallower drillers and land drillers may give the best bang for the buck, but for now I prefer a more cautious stance short term and a better predictability long term. Baird