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

To: SJS who wrote (27875)	8/17/1998 10:12:00 AM
From: Platter	Read Replies (1) \| Respond to of 95453

From Briefing.com "OIL MERGERS AND DOWNGRADES. There are reports this morning that DuPont (DD) may sell its Conoco oil unit to Elf Aquitaine for as much as $25 billion. This would continue the consolidation in the oil industry that was reflected in the British Petroleum and Amoco (AN) merger last week. Expectations of further consolidation has boosted the stock prices of oil companies. Apparently with good reason. DD stock is expected to open higher today and these reports may boost other oil company stocks that could be considered merger candidates. There is also bad news in the oil sector today. DLJ is lowering earnings estimates for oil services stocks. Wall Street has stubbornly clung to the belief that oil prices will rebound in the second half of this year, but it just isn't happening. Forecasts for oil and oil services companies profits have incorporated higher oil prices that now seem unlikely to occur. Weak Asian economies are keeping demand for oil weak, and there is no sign of a rebound there. It is therefore becoming harder and harder to assume that oil prices will start rebounding "over the next two quarters." The reduction in earnings estimates for oil related companies therefore are simply a reflection of the current situation. The wishful thinking is being squeezed out. DLJ is also suggesting that the consolidation in oil companies may put further pressures on oil service company profits. Regardless of whether that is true or not, it reflects the pessimism that is sinking in with regard to the outlook for oil service company profits. "...THIS MIGHT BE A BLESSING IN DISGUISE SINCE , LIKE THE SEMI"s, AT LEAST THESE COMPANIES SHOULD BE ABLE TO MEET OR EXCEED THE LOWERED EXPECTATIONS....AND EVEN BETTER YET, IF OIL PRICES PICK UPIN THE COMING MONTHS DUE TO PRODUCTION CUTS FILTERING THROUGH THE SYSTEM AND SEVERE WINTER EXPECTED DUE TO "LA NINA".....