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

To: chirodoc who wrote (30328)	10/4/1998 12:35:00 PM
From: Paul Angell	Read Replies (1) \| Respond to of 95453

I have been long DO for the past year but they hit my electronic stop yesterday. It was a mistake because the downside risk is small from here on. I will get back in soon. I am long BHI since January. All the bad news is out IMHO, and they are set to become a formidable company if they can avoid the pitfalls of fragmentation. Baker (via Inteq) are now the largest directional driller in the world since acquiring Drilex. They have a lot going on in their slimhole MWD business also. I think they did a smart thing when they bought Western Atlas, who were closing the technology gap with SLB in electricline technology. This set Baker up for slimhole CT drilling with MWD or elctricline drilling, and this technology is staring to catch on big time. I am watching SLB and HAL, these 2 are bellweathers and will consolidate internally, so that they are in springboard position when the upturn in price firms and holds. They both have strong "alliance" type arrangements with the major integrated companies and so are "somewhat" protected with well servicing work during a slowdown. I own FLC and UTI, but I must admit that I have no feel for where they are going. Only that they stand to gain from a potentially massive consolidation that will hopefully occur in land and shallow water drilling. Now the majors. If I were to advise anyone I would have to say look at Arco (7th largest major). Rumors in Anchorage that Mobil are eyeing them up since the BP merger with Amoco. Things could get interesting. However, my money is on Chevron buying them, because they just announced an exploration alliance with Arco for some new acreage on the North Slope. Arco management have told the press here that they want to stay independent but the obvious implication is that they would accept the right offer. Regards, Paul.