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

To: 007 who wrote (21358)	5/4/1998 4:03:00 PM
From: Broken_Clock	Read Replies (3) \| Respond to of 95453

Good logic but find the ones with least DEBT! I looked at KEG but seemed to have excessive debt in relation to others. We are also at the bottom of the interest rate cycle. Likely fact....commercial loans are short term unless done as a floated bond.

To: 007 who wrote (21358)	5/4/1998 4:13:00 PM
From: pz	Read Replies (1) \| Respond to of 95453

007, <<< think the best opportunity in the entire sector is buying the land drillers at the bottom of the commodity price cycle. At that point, they have very little downside and the greatest upside. They're undervalued presently and are likely to realize much greater proportional gains from improving commodity prices. Why lock in earnings in the deepwater at a time when crude has very little downside?>>> I don't disagree with your assessment at all. It will just take time for operators to get excited about drilling again. Just because oil goes up to $18 or so doesn't mean that operators will be ready to drill again, this will be a slow process. These operators have just had their revenue cut by 40% and it will take a while to build up the cash reserves again. But like you say...this may be as bad as it gets. I happen to think that the downside risk in the land drillers is very limited, but the upside may be limited also for a while. I will definitely put money into the land drillers, but just not right now...they just need time...IMHO. Regards, Paul

To: 007 who wrote (21358)	5/4/1998 4:26:00 PM
From: pz	Read Replies (1) \| Respond to of 95453

007, < FWIW...I talked to a drilling contractor in Midland this morning. They have 17 total rigs, 9 stacked, 8 currently running. Last year they had 11-12 running. Drilling rates have fallen off 15% since last year and are STILL FALLING. Land drillers are still risky IMHO.>>> The company I called this morning was TBDI located in Midland, Tx. I was very interested in them because their PE caught my eye. They have a PE of 7 and NO DEBT. I was a bit surprised when they mentioned that they had stacked so many rigs and they also mentioned that rates were still falling...these 2 things bothered me. I will definitely keep an eye on this company for when oil prices do firm up a bit more. It just needs a bit more time. Regards, Paul