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To: Chris who wrote (6523)	3/2/1998 5:25:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

There is definitely accumulation going on there, particularly if this takes place over a period of time. Is Chevron a leader on its industry, as far as the stock market is concerned? It probably is, but I do not assume unless I see the technical evidence. If Chevron is a leader, then I would look to see if there is evidence of accumulation of other oil stocks that have a large presence in this industry. Note that there is a difference between the oil drilling industry and the oil service industry. The oil drilling industry are those that as the name states drill for the oil on land and in the ocean. The drilling can also be for natural gas. Drilling for natural gas takes place at shallower depths which means less cost is involved in its extraction. The oil service are those that bring materials to cool off the drill, or take away materials that are generated in the drilling process. The pipe may go down over 15,000 feet into the ocean. As the drill continues down into the ocean, when the last pipe segment of the "drill" is level with the floor of the platform, another segment is attached for the drilling process to continue. The pipe segments are handled with chains and if you are not careful this can be dangerous. It is not uncommon for the worker's hand to be permanently disabled in some fashion in their work with the chains and the pipes. In the initial exploration process, samples are taken at different depths and capped. I think this is the process they use to determine the extent of the "pool" of oil that is available to be extracted. Many oil wells are capped. The oil company knows the cost of oil from a given oil well. This depends on how deep they had to drill and also the quality of the crude. They regulate their profits in relationship to the cost of pumping the crude. As the oil prices move higher, this make the pumping feasible from more costly wells that have been previously capped. This is like what the gold mines do to manage their costs and associated profits. Except in their case they manage the costs by the vein of gold that they drilled in relationship to the current price of gold. The capped wells are referred to as oil reserves. It is a common and necessary practice to have oil reserves and manage their cost in relationship to the current market price of oil. One company's oil reserves can be sold to other companies too. This is about all I know about oil companies that I have heard from that person who was an executive at Halliburton other than how oil is verified and drilled for on land. I will refrain from going into that here. Just for your information. Any corrections are welcome. Bob Graham