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: Big Dog who wrote (22875)	5/27/1998 10:44:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Big Dog thanks for getting off the porch ! more good news- I agree 100%; there is little reason to fundamentally delay buying those you mentioned. I hold all of them except VRC of which I just have not researched adequately. Gotta love FGII and EVI which I feel are ''must owns'' in any oil patch portfolio. MDCO at $18 is like shoplifting ! Some of the boat/fab companies just have too great a backlog of business for their earnings to be impacted in the next 2- 3 quarters; which gives crude prices quite some time to stabilize - how and why are these babys being thrown out with the bathwater ? The entire downturn is related to the expectations of a continued depressed crude oil price enviroment; which will lead to cuts in E & P by the major oils, the corresponding stacking of land rigs and lower renewals for offshore contracts and related revenue drops to the service sector. Hopefully this info will shed a more positive and reality-based light (in historic perspective) to the oilpatch: ...again from the folks @ DLJ: "We started the year with an assumed 1.3 million barrel per day (b/d) surplus in the crude market for 1998, with the prospect that Iraq could add another 500,000 b/d to the excess. Our assumption is based on a 1.0-1.2 million swing in Asian demand plus the effect of warm weather and higher OPEC production. We had expected rising demand and curtailed production to balance the market through the course of the year. While normal "self-correction" factors of supply and demand would have rebalanced the market, the Riyadh Deal was constructed to speed the process enormously. The Deal, if strictly adhered to, would rebalance the market itself by early summer. More likely, we will see several additional iterations of the agreement to expand curtailments from the 1.6-1.8 million b/d starting point. Riyadh: Not to be Taken Lightly The Riyadh Deal should be distinguished from OPEC deals, since OPEC has had little credibility in recent years and chose not to endorse Riyadh in any formal matter. In fact, we view the Riyadh Deal as another sign that OPEC has very little power. Essentially, it took an outside arrangement to orchestrate crude production cuts. The countries appear to be living up to their Riyadh commitments, but there is seasonality to consider. The deal was signed just as warmer weather begins and the heating season ends, and we have yet to really start the driving season. As we move into the driving season, we expect to see more of a pull on inventories and could see upward revisions to demand estimates. Later in the year, as we move back to a heating mode, the market should again be in a seasonally normal crude-short position. Many of us have heard on the quarterly conference calls from the oil companies that Venezuela, Nige-ria and Mexico have actually curtailed production and told companies to curtail their liftings. We have also received secondary signals that Kuwait and the UAE have actually curtailed, and our global trans-port services analyst, Phokion Potamianos, has noted that Saudi Arabian liftings have been cut. Iran is perhaps the one country that has been more ambiguous, not surprisingly. Nonetheless, we look for the Riyadh Deal signers to do what it takes to get oil prices back to the upper teens. Several Other Dynamics: Inventories; Iraq; Acquisition Activity Inventories are higher than they were a year ago, but they are nowhere near the levels one would imagine when looking at the headlines. With oil at $15 per barrel, one would think that inventories are really brimming, and yet inventories are right back in the middle of what had been a historically normal range prior to 1995. We have just gone through two years of very low inventories, making for some tough year-over-year comparisons. Iraq is a wild card that most of us have gotten used to, but we remind investors not to forget its potential negative impact. Tensions between the UN and Iraq are running as hot as they have run in many months. With the Iraqis under the impression that sanctions are about to be fully lifted, and the United States and the United Kingdom standing firm, there is a possibility that the Iraqis will break off cooperation, kick out the inspectors, and slow production of oil."

To: Big Dog who wrote (22875)	5/27/1998 11:56:00 AM
From: Bazmataz	Read Replies (1) \| Respond to of 95453

What's your favorite of the six you mentioned? If you can say, what was said at Bear Stearns? Thanks Baz

To: Big Dog who wrote (22875)	5/27/1998 1:08:00 PM
From: SliderOnTheBlack	Read Replies (4) \| Respond to of 95453

Big Dog .... & others; comments on who will lead the breakout ? When we do turn the corner here; what 3-4 companies do you feel that short term will have the largest and quickest breakouts (%-wise) ? I'm leaning toward CDG breaking out from current levels the quickest. Big Dog; any news from Bear Stearns ?