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

To: Czechsinthemail who wrote (13665)	3/5/1998 3:31:00 AM
From: upanddown	Read Replies (1) \| Respond to of 95453

Now the Venezuelan oil honcho says that they will attend a mid-month OPEC meeting if invited (presumably they will get one). The rumor that they would not attend really hurt oil stocks late yesterday. Maybe this news plus some rotation money out of tech will steady the OSX tomorrow. Good luck, John

To: Czechsinthemail who wrote (13665)	3/5/1998 7:35:00 AM
From: Thean	Read Replies (3) \| Respond to of 95453

FLC finally reported this morning. No fundamental bad news! Excluding merger and other one-time writeoffs, their earning was $0.41, match consensus but beat the three most current estimates of $0.39. Overall upbeat comment on dayrate and business going forward. However, the merger cost and business disposal cost could be steeper than initially thought. But that is now behind them. biz.yahoo.com

To: Czechsinthemail who wrote (13665)	3/5/1998 1:36:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 95453

Baird, I have to disagree with you. The Barron's article said: "In April and May, many contracts for drilling rigs are coming up for renewal -- nearly 33% of Gulf jackup rigs, in fact [the kind that are towed and set up in relatively shallow water]. When that happens, the exploration & production (E&P) companies that use contract drillers to extract oil for them will undoubtedly try to cut better deals because of the declines in crude prices that have already occurred. Generally, the lower the price of oil, the lower the day rates drillers can command for their services. "As a result, Maat estimates that E&P company operating cash flows will fall by 15% in 1998. And the pressure to negotiate lower day rates will be even stronger on the smaller independent operators, whose projects are more sensitive to the price of oil. The upshot: with lower day rates, the drillers could be hurt more than Wall Street is expecting." Historically, day rates have varied with the availability of jack-ups. I believe that the evidence to date indicates that the day rates are continuing to climb, although not as rapidly as they had. Perhaps Maat might make a better case if he correlated the profit per bbl (which includes the extraction and exploration costs) to the day rates. In any event, we know just how volatile the price of oil is, and we also know that oil will increase in cost as time goes by, so even using Maat's argument we would expect day rates to escalate over the years. But this argument has been rebutted by several industry insiders who point out that day rates are much more sensitive to the aggregate demand in bbls then they are to the price of a barrel. One thing we can certainly agree on -- the stock market seems to be focused on the price of oil. Regards, Paul