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

To: SliderOnTheBlack who wrote (24888)	6/28/1998 4:25:00 PM
From: NucTrader	Respond to of 95453

Thanks, Slider. Good info. I'll take a closer look at FLC.

To: SliderOnTheBlack who wrote (24888)	6/28/1998 5:24:00 PM
From: TRINDY	Read Replies (1) \| Respond to of 95453

Hope springs eternal, and may well spring upwards from here. Who knows? When I fell most depressed that is generally sign of a turnaround. But lest we get too enthusiastic, let us remember that we are definitely in a bearish mode and I, for one, have yet to see any solid evidence of a turnaround. Such evidence may just be around the corner, but I will wait for it to show itself clearly. The current hot spell may provide some needed relief for natural gas prices, which have been in a tailspin lately. Some evidence of this turnaround was apparent at the end of last week. That is one type of good news we are seeing. The OSX was down 2% Friday. Down from 100 recently. The XOI oil index was looking more favorable at the end of last week. Big oil maybe rebounding from its recent drubbing. So, it wouldn't be surprising to find it bounce upwards in OSX next week. But, let us not deceive ourselves. The stock market is a discounting mechanism. The trailing PEs don't matter. It's the prospects in '99 and beyond that are driving the market for oil services. Those prospects appear bleak at present. Take a look at the long term price charts for such stalwarts as CDG, RIG, ATW, SLB if you want to sober up. CDG's current price $32; Jan 1996 price $8. RIG now $42, was $22 in Jan 96; was $9 in Jan 95. ATW now $38; Jan 96 was $12. SLB is $67; was $33. You get the picture. There is considerable room to drop from here if that is where we are going. I'm not saying that we are going there, but it is in the realm of possibilities. What I fail to see discussed as much as I think it should be on this thread is the productivity of drilling today in comparison with the past. Are we not now hitting new wells with a much higher probability owing to 3D-Sesmic, computational power, and the like? I hear evidence that that is happening, but I don't see much discussion of the impact of such higher productivity on this thread. Do we have any experts out there on this subject? Higher hit rates could make for fundamental shifts in drilling demand and induce a secular decline in such activity. I hope we turn around on a sustained basis. I have some of these puppies, but fewer than I did a three weeks ago. But, personally, I am not going to reenter relinguished positions until the news gets fundamentally better. We will likely get a pop next week with the Wall Street Week mention and with the heat wave. It is going to take much more than this to turn this market around. I'm waiting, BWDIK?

To: SliderOnTheBlack who wrote (24888)	6/28/1998 9:33:00 PM
From: Bernie Diamond	Respond to of 95453

FWIW - Barron's Midyear Roundtable (June 29th) Three of the 11 interviewed (mid-June) were positive; none negative, as follows: ARCHIE MACALLASTER: Q: Why higher? (referring to interest rates) A: I know a lot of people think rates are going to 5%, but I wonder. A lot of it has to do with the price of oil. It's going to be volatile, but likely higher, later in the year. It is such a bargain these days. MARC PERKINS: Q: Do you have a third idea? A: ...Another repeat is to buy oil. Q: You always say that - we didn't even bother listing it in January. A: So I don't even need to give you names. Anything that has oil in the ground, just buy it. Put it in a vault, forget about it. Don't worry about what it is going to do for the next three months or six months. Ideally, you want to find companies whose oil in the ground is values in the market at $3.50 a barrel of oil equivalent or less. Oil is not going to stay at $13. Supply and demand got out of whack because of a combination of El Nino and Asia, but demand will go back to growing and production capacity has been declining for a dozen years. I don't remember ever being able to buy oil this cheap. Q: But it could stay that way for a while if you're right about the economy. A: Even if you have to wait a couple of years, the way I look at it is that Venezuela's oil income, they just announced, is down 40%. The oil-producing nations with excess capacity will sometime in the next year make major production cuts, because they have got to get their revenues up. They will be pained into doing it. Saudi Arabia will be a financial basket case if oil stays at $13. Venezuela, Nigeria, which has other problems at the moment. They are dependent on oil. So you just buy the oils, the drillers, any of the stocks. They may be very volatile in the short term. But I view energy right now as being as close to a "can't miss" proposition as banks were in 1991. Sometimes stuff just gets so cheap that trying to be too smart about timing costs you a lot of money. Oil right now is one of those things. JAMES ROGERS: Q: We hear you. Would you make any changes in your recommendations from January? A: For the most part I stand by the things I said then. There is nothing I would say "oh my gosh" about. Some prices have gone against me. But there's nothing horrible. I said we'll certainly have great opportunities to make money on the the long side in oil between January and December. We still will. It's way down now, but I'm very bullish on it. All these oil companies, I'm bullish on. ---------------------------------------------------------------------------------------------- Bernie, long DO, ESV, FLC, GOU, NE, PKD, RIG, and still buying. Thanks to everyone for sharing their expertise and thoughts. You guys are great! p.s., If, as stated before, when us newbies buy that's a sure sign prices will drop, go ahead and short like hell. <g>

To: SliderOnTheBlack who wrote (24888)	6/28/1998 9:42:00 PM
From: marc chatman	Read Replies (2) \| Respond to of 95453

<<does anyone think that Asian demand will not increase in near term ? >> I think it's possible, but I guess it depends what you mean by "near term." If you mean 12-15 months, I think you have a good shot at it. If you mean the next few months, though, I have my doubts. If China devalues, for example, that oil (priced in dollars) becomes a lot more expensive over there. But my technical indicators indicate we should get another bounce early this week, at least for the OSX. This may end up being a great time to buy some of these stocks, but everyone should know it is certainly not the safest time. We could get another downleg after the bounce, taking many stocks to new lows. We could even sell off a few points before the bounce. I still believe there will be some selling on margin calls. And what about the recent history of the crude futures contract tanking as delivery approaches? Regarding the possibility of missing 10-25% to the upside, I think there is always more than 1 chance to get into a stock which is bottoming. Nothing goes straight up after it has gone through such a steep decline. People who bought 3, 5 or 10 points higher only to have taken an ugly loss will jump at any opportunity to get out whole or nearly whole. And based on the recent short interest numbers which were posted here, I don't foresee any explosive short squeezes. There will be many opportunities for the patient. For every investor who calls the bottom perfectly, there are many more who get their fingertips cut off. I wish everyone good fun and luck with the contest. But I hope people don't get so enthused that they ignore the possibility of more bloodshed.