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

To: seadust who wrote (24559)	6/23/1998 12:48:00 PM
From: Tulvio Durand	Read Replies (1) \| Respond to of 95453

Deep water drilling and rig construction are unaffected by low oil price according to the article you posted. Referenced article (from seadust's post) and relevant excerpts: nolalive.com Drilling in the deep water of the Gulf, an activity that has mushroomed in recent years, has not slowed. Most of the deep-water drilling is done by major oil companies that do not have to rely on current cash flow for their drilling budgets. Furthermore, it often takes up to three years from the time drilling begins until the first oil and gas are brought to market, allowing time for prices to recover. ... Rates have held steady or risen for equipment to be used in deep waters of 1,000 feet or more. But the workhorse of the Gulf, the jack-up rig used in water 300 to 350 feet deep, now brings less revenue. A rig that rented for $55,000 to $65,500 a day in January now brings $47,500 to $62,000. Nor is rig construction work suffering because of low oil prices. To wit: ... Nor has the construction market, which provides jobs to thousands across the Gulf Coast, suffered. ... Yards have a backlog of work and are bidding on new contracts. So it seems to me that when the oil market again collapses after the OPEC meeting one should look for opportunities to buy the deep-water drillers and rig builders on the cheap. Tulvio