Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Challo Jeregy who wrote (16429)	3/25/1998 8:56:00 AM
From: Big Dog	Respond to of 95453

Challo -- As far as for the decline of the rig business it was an acute over supply of rigs. Remember that drilling took place in much more shallor water back then. And the closer to the shore the more sensitive are drilling programs to oil prices.

To: Challo Jeregy who wrote (16429)	3/25/1998 9:13:00 AM
From: Daniel M. Whipple	Read Replies (1) \| Respond to of 95453

Challo, I would have to say that the cost of E&P was considerable higher than it is today/barrel of oil. In the early 80's Shell was just thinking of deep water exploration. With the development of new technology, the risk of hitting a pool is a lot lower. Also some ask why deep water vs. shallow or land rigs. The pools in deep water are much larger than onshore, therefore the cost /barrel is much lower. Like most sectors, Oil is a cyclical stock and at some point will be a definite sell. I believe we are in an early stage of the run and have only had a temporary setback. As far as OPEC and the other oil producers reducing production, it is a given for the time being. As long as they get the price back to at least $18/barrel they will say or do whatever it takes to accomplish this. Reality is that they may not cut back, but if the market prices the oil at $18 they don't care. Also, I think the current interest rates have a lot to do with demand and the ability for these companies to spend on E&P. The interest rates in the early 80's were out of sight. The long term outlook for the foreseable future is continued low rates. Got to be good.