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

To: Lucretius who wrote (13762)	3/5/1998 1:59:00 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 95453

No I don't own PDE. Their heavy emphasis on land-based and shallow drilling scares my timid bones. I think the risk/reward picture looks better for the deeper drillers, but then I'm more cautious around forecasting a major increase in oil prices from here. I personally like the greater predictability and stability of the deeper drillers. Still, if we get a dramatic strengthening of oil prices, with a reinforced sense of drilling boom, I think PDE may outperform. They will outperform for precisely the same reasons they may underperform if drilling demand weakens--those land and shallow drilling rigs with shorter contracts that will more sensitively trace the ups and downs of drilling demand than the long term contracts. I don't know exactly how much PDE paid for the rigs, so I really don't know if they overpaid ot not. My sense is that they wanted to expand their offshore presence and this provided a fast way of doing it. Even though the lead time for shallow rigs will be considerably less, according to the Big Dog nobody is currently building them. Again, I think it depends on how strong drilling demand is going forward. If it's extremely strong, having as many rigs as possible will look like genius. If not, having cashed out looks brilliant. Baird