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

To: sand wedge who wrote (32640)	12/9/1998 10:26:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Sand Wedgie; Kudo's - you got it right on the money...re: consolidation It has amazed me that soooo many analysts/fund managers got it all WRONG; and/or just didn't know what to think... ie: fear of the unknown - so they sell off these stocks, or miss a great entry point. Sure; the total capital expenditure budget of the Exxon/Mobil merge will be less than it was with the individual companies prior to merging. But, the major and small independants will pick up those pieces. When the ''majors'' trim personnel, divisions and departments; this creates opportunities for the independants. Most importantly; a more profitable, stronger, more efficient group of ''super-majors'' is good for the Oil Industry. Companies like Apache & Anadarko which are the top tier Independants will have tremendous opportunities to partner and/or acquire projects spun off by the Big Oil's. Even smaller companies like FEN purchased a great exploration package in Alaska's Cook Inlet from a Major Oil Co. Investing in these strong & aggressive Independant E&P's right here at a historic bottom; is a great opportunity. APC APA offer tremendous opportunities as do some Natural Gas oriented companies than have been sold off in lock step to more ''oily'' names... Apache is a tremendous buy here, they have a tremendous Internationally diverse portfolio of projects and a lot of cash. We are seeing a window of opportunity here imho; as both the Street and individual investors are ''frozen'' not knowing what to do here... they don't know what to do , so they are selling; and/or doing nothing. One caveat however, it is a prerequisite to be a good company/stock picker here... ie: Apache & Anadarko vs. some of the higher debt less technologically respected companies... This is why there is still so much ''action'' on FLC; which with their seemingly endless forray into debt and newbuild after newbuild; seemingly teetering on the verge of the abyss of debt and a$9 Crude envioment with the accompanying fall of dayrates... However FLC is well respected for managing this incredible debt load; and without question this company is putting their ''future'' on the line with this hyper-aggressive use of debt, acquisition of assets and companies. However; I (like DLJ) think they are borrowing money at a historic low, acquiring assets & companies at historic lows; and will be dynamicallly positioned like no other company when the tide does turn here. And, their bet is that it is ''when'' and not ''if''. I personally like their style and they are #1 on my list to buy a large position on any further retraction here. KEG also, is an interesting ''leverage'' play; they have been sold off here to a level that they are at a bargain multiple of their cash flow. Their cash flow is strong and will carry them through the storm here, they also will emerge with much greater earnings capacity when the tide turns. However as they are primarially a land oriented company, they are much riskier than FLC being an offshore driller. good luck all; this is as close to free money for a ''buy & holder'' with patience (18-36 months); as exists in the market and that has existed perhaps in the last decade. One question that keeps coming up; is - ''why aren't the analysts literally standing on the table and screaming - BUY; let alone pounding the table for the oilpatch'' ? Imho; because there is no ''percentage'' in it. This is an all most pure ''momenteum'' marketplace. Far more jobs are lost by sticking ones neck out than by following the herd... Most analysts only have a near-term window of analysis; how often do you hear a fund manager or analyst say; buy here, because if you don't buy here, you will miss a 40-50-75% move in these stocks; however the sector could go down another 20-25% in a worst case scenario; but the upside so dramatically overshadows the downside; that we rate this sector a strong Buy - with a minimum 24-36 month time horizon etc....?