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

To: Gator II who wrote (26822)	7/31/1998 3:04:00 PM
From: marc chatman	Read Replies (1) \| Respond to of 95453

Big Dog can speak for himself, of course, but it seemed to me that he was making a call on the GOM jack-up market based on his fundamental view, and reallocating assets. I didn't get the impression that he was blowing off the sector (although the notion of investing for "safety" is not something which would attract me to any stock in the oil patch). I do agree with you, Gator, on how easy it is to lose perspective. I would feel much more bullish now if I were buying in for the first time at these levels instead of several points north of here.

To: Gator II who wrote (26822)	7/31/1998 4:14:00 PM
From: Big Dog	Read Replies (3) \| Respond to of 95453

Thanks for the comments Gator -- What really worries me is the continued decline of day rates. It has been only this week that I have learned it is getting worse, not better. I fear it is worse that the analysts know. I also know that drilling contractors will not do what is best for the day rate market. There never have and never will. They will bid these rigs at whatever price they have to in order to get a job. This puts rates into a downward spiral very quickly. (DO did cold stack a semi, but they are "dominant" in that market segment.) As goes the Gulf, so goes other markets. You might say the Gulf is the "swing producer" for rigs due to the well-to-well market that exists. So no, I don't see opportunity in these stocks just because they are crushed. What I see is the possiblity of them getting crushed even more...UNTIL oil prices rise. Then I'm back on board. I did not get out of the sector. I shifted to VRC and RIG. Maybe I should have just stepped aside, but these are two of the best and hopefully the least affected by continued day rate weakness. In a nutshell, I kept thinking day rates would start to turn up...they haven't and they show no signs of firming. Lower day rates = lower earnings. big jump.to