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

To: Big Dog who wrote (31532)	11/5/1998 9:19:00 PM
From: Tomas	Respond to of 95453

Shell blames oil price & Asia for appalling Q3 results, but they have to take most of the blame themselves Tighter Shell should perform The Independent, Friday November 6 Shell yesterday achieved the seemingly-impossible task of causing universal agreement among City analysts. The problem for the Anglo-Dutch oil giant is that the Square Mile's finest all agreed that its third-quarter results were appalling and that the company, rather than external conditions, had to take most of the blame. They are probably right. Net income in the quarter plunged 56 per cent to $841m (£526m), worse than even the gloomiest predictions. The company pointed to a slump in the oil price and tough market conditions in chemicals as the main culprits for the fall. This justification has two major faults. First, these factors have been around for some time and Shell should have done something about them. Second, why is Shell more affected by bad trading conditions than rivals such as BP and Exxon which operate in the same markets? The answer is that, unlike its competitors, Shell has done remarkably little to counter the cyclical swings of the market with cost reductions and efficiency advances. To take a domestic example, BP plans to achieve $2bn of 'self-help' improvements by 2002. Shell has only just started, with plans to shed up to 4,000 jobs from its bulging workforce announced in September. Yesterday's debacle should trigger even more draconian culls, with chemicals and refineries the likely targets. Asset write-downs are also on the way. The prize is potentially huge. The company's assets are as good as they come in the industry and a leaner, meaner Shell would be able to unlock value for investors. The shares, which fell 21.5p yesterday to 354.5p, have come down a long way and are now trading at a discount to most of its rivals. If you believe that Shell will sharpen up, they are worth a punt. independent.co.uk

To: Big Dog who wrote (31532)	11/5/1998 9:38:00 PM
From: mph	Respond to of 95453

OT to Mikey: So, you were strolling through the wilds of N.Y. City, eh? I'm glad that you made it back safely to the heart of Texas. Given your previous descriptions of Ms. Mavis, though, I can't help but think that your lunch with her may have been slightly more dangerous than any of your other activities in the Big Apple.<g> mph

To: Big Dog who wrote (31532)	11/5/1998 10:05:00 PM
From: Jamey	Read Replies (2) \| Respond to of 95453

Double Doggie, I'm happy that you survived the runover capital of the world and made it back to the bosom of the heartland. The next time you are in San Angelo give an extra hard look at the prettiest ladies in the USA. OPEC is in 83% compliance on July production. eia.doe.gov Santiago

To: Big Dog who wrote (31532)	11/6/1998 12:26:00 AM
From: SliderOnTheBlack	Respond to of 95453

I knew Diana would bring the Dog outta the house on that one ! <VBG> - ''decoupling'' - been there done that... Thought the "Dog'' might have an opinion on that one... I also say ''Trade 'Em'' , but I am smellin a Rig Party in the not so distant future <VBG>. What a discussion to have over a couple of LoneStars and some Texas BBQ ...into the wee hours - I'm sure. PS; after this OPEC Meeting; another Fed Cut, Japans Bank reform taking hold, Techs announcing increased Asian demand, La Nina Winter etc. - I'm thinking the "Run'' will start again in mid-late Jan imho. ~ maybe a couple of bumpy ''trading'' months untill then. C'Mon $36 FGII, $50 WFT, $60 RON etc... not that far away...and we will need $16+ Crude to get there, with the expectations/trends toward $18 ...

To: Big Dog who wrote (31532)	11/6/1998 11:17:00 AM
From: diana g	Read Replies (3) \| Respond to of 95453

Hi Big! First, I want to say that while I disagree with you about the Oil Price Thing, I have great respect for your expertise in regard to rigs and your knowledge of the Oil Business in general. I appreciate your sharing your knowledge and opinions with the thread. I am just a simple grrl, but I have given this some thought, and talked with my dog Socrates about it, and this is mvho: Oil Price and Sector Stock Price are both artifacts of Demand/Supply and react positively to increased (Supply-Adjusted) Demand. But they are Not Causally related to each other in any important way. And since there are factors affecting each which do not affect the other in the same way, either could move up or down without the other neccessarily moving, or one could precede the other up or down. With that in mind, I think that the thing to watch is 'Future (Supply-Adjusted) Demand', Not Oil Price. I think my position is based on fact and reason, and recent history seems to support my conclusions. ----------------------- Let me use extreme hypothetical examples to make my point: --- What if Oil Price stayed low, but Demand Doubled? Would anyone want to drill? I think the Sector would be making money hand-over-fist as long as the Oil Price was just a little higher than the cost of production (which it would be, of course.) ---And what if Demand dropped by Half, but Price went to $25? OSX would be in Big Trouble. No Demand=No Work, regardless of Oil Price. ----------------------------- BTW,I do think there are segments of the oil business which Are much more dependent than others on Oil Price, such as higher-cost producers and their dependent businesses. But I think that in general this Sector will follow the Market's Perception of Future (Supply-Adjusted) Demand, and Oil Price can be left to take care of itself. Oil Price is of interest, since it can serve as a more immediate indicator of current Supply/Demand balance, but it is not Causitive in an important way. In the short term, as a cost saving measure, Big Oil may cut back on their expenses in this Sector . But in the longer term they're out of business if they haven't got oil. They can't sell oil they haven't got, and to get it they've got to drill and service wells. They will do that as long as there's Demand. If the cost of drilling and servicing wells is prohibited by low Oil Price, then the Oil Price will rise, as long as there's Demand. Oil Price may rise sooner or later or not at all, depending on circumstances, but Demand's the Thing To Watch. Just mvvho, of course. regards, diana