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

To: Douglas V. Fant who wrote (36298)	1/30/1999 9:30:00 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 95453

Doug: Several issues did indeed make classic selling climaxes Friday. I am not yet sure that OSX has bottomed (although I think so) and neither is anyone else. But I am quite certain that we are in the process of BOTTOMING. OSX has perhaps another 10% downside if OPEC does nothing in March. But the upward potential over the next 12-18 months probably is 200%. The real question is have earnings estimates been slashed enough to fully doscount the very dismal near-term outlook? A sustained uptrend is out of the question as long as estimates keep coming down. Another "blood in the streets" article. The kind of thing one expects at or near major troughs. Friday January 29, 5:53 pm Eastern Time Oil Industry Slump Likely to Linger By MARK BABINECK Associated Press Writer HOUSTON (AP) -- Any improvement in the nation's sagging oil and gas industry probably won't come soon enough to prevent 1999 from being among the industry's worst years, according to a trade magazine survey released Friday. In World Oil magazine's annual letter to oil industry executives, publisher Lanie Finlayson said survey data foreshadows an 18 percent decrease in oil and gas drilling from 1998's anemic levels and continued poor rig counts. Houston-based Baker Hughes Inc., which has monitored rig counts since 1944, reported Friday a record low 562 active U.S. rigs this week as weak prices continue to stifle exploration and production. ''It's difficult to find anything positive to say about drilling activity, especially in the U.S., after the devastation that occurred during 1998,'' said Finlayson, whose magazine is owned by Gulf Publishing Co., which has followed the industry since 1916. Based on its survey of 20 major drillers and 235 independents, World Oil forecasts 21,125 wells will be drilled in the United States this year, down from 25,639 in 1998. In Texas, the magazine predicts a 23 percent cutback in drilling from 8,846 rigs last year to 6,797 in 1999. California should fare even worse, with a projected drop of 44 percent, from about 2,400 rigs in 1998 to 1,350 this year. The news is better internationally, where production costs are cheaper. Total drilling activity is expected to dip just 4 percent, though the survey bodes ill for drilling prospects in the North Sea, South America and several other regions. Some industry watchers are skeptical of the widely reported oversupply that has cut oil prices in half over the last two years. ''I don't think it ever existed,'' said Henry Groppe, founder of the Houston-based consulting firm Groppe, Long and Littell. Another analyst agreed the perceived oversupply is widely questioned in the industry, but cautioned that recent warm winters, depressed Asian economies and rampant production from members of the Organization of Petroleum Exporting Countries must turn around for prices to change. ''Demand coming from the emerging worlds, specifically southeast Asia, was probably the main contributor to incremental growth in the last 10 years,'' said William Herbert, chief oilfield services analyst for Howard, Weil, Labouisse, Friedrichs in Houston. ''That evaporated and hasn't come back.'' Russell Wright, World Oil's editorial director, said any improvement in the oil market is likely to be tentative and could come too late to save the industry from a dismal 1999. ''Don't expect higher prices to impact drilling levels, since operators will hold off on plans until they're sure it's for real,'' Wright told more than 600 industry representatives at a breakfast hosted Friday by the magazine.