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Gold/Mining/Energy : Ensco International Inc. (ESV) -- Ignore unavailable to you. Want to Upgrade?

To: Barry Cartwright who wrote (1135)	4/22/1998 9:25:00 PM
From: William L. Oppenheim	Read Replies (1) \| Respond to of 2005

Oil service stocks don't in the main own the oil. Thus, whatever oil is worth at the moment is not pertinent. The contracts go out for years at a time, and to my understanding are not based on the price of oil. Over time, if the production of oil is not economically feasible, of course there will be a decay in the contract rates as more rigs chase a lesser demand. However, the cost of getting oil out of the ground is not excessive as with the new technology there are fewer dry holes. Currently the psychology of the market links the spot price of oil to the market price of the oil service stocks, but to my mind, that is what the term inefficient market is about. If you believe, as I do, that oil is going to be greater demand over the next decade, eventually the market will wake up and reward these companies for what they do and delink them from the spot price of oil. Compared to other high tech stocks, the PE's here are compelling. More and more folks are recognizing this, and the price slide that started in October has stabilized, and over the past month, some stocks have even begun a climb again. Classic turnaround play, cept the sector didn't deserve the rap they got in the first place. The main risk here is market psychology rather the nature of oil. Eventually that will be self correcting.