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

To: Mike from La. who wrote (37872)	2/19/1999 11:46:00 PM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 95453

Mike, don't you think that expectations are pretty low for anything of substance to come of this next OPEC meeting? Take last May's meeting: Ok they agreed to cut, PTL. But what did oil prices do? They continued down the same path, reaching $10 within seven months (Dec '98). They cheat, drag their feet, etc. Venezuela is only now this next month (Mar.) meeting their cut commitments from last May. That's 10 months. So even if additional cuts are announced, I don't see why the mkt will care that much, if it's going to take another 10 months to get the last foot-dragger to meet their commitment. And even when you're done with that, they cheat, they cheat, the glut, the glut, yada yada yada. IMO genuine supply/demand is the only thing that will affect the price of oil, and the expectations for recovery in the OS sector. We have seen reports that Asian demand is picking back up. US and Canadian production has decreased, while demand in the U.S. is going up a little. lotsa wells are shut, etc. etc. I think if one wants to get into the patch, or is already in and you don't want to cut your loss and leave, then the best thing is just to sit tight while supply/demand moves naturally back into balance. It will happen, albeit slowly and stealthily. At any rate, I feel I got a bargain with FLC at 5 15/16. If oil prices go up, FLC will go up. Oil prices have stabilized for now, and Dec. probably marked the low.

To: Mike from La. who wrote (37872)	2/20/1999 12:30:00 AM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 95453

Mike, I agree with all of your comments except the one about Saudi Arabia. IMO Saudi Arabia too is being punished by the low prices. Note that most of Saudi's oil revenue comes from sales of crude oil, not product so they too are hurt by lower crude prices. With a wary eye upon its restive neighbors Saudi Arabia has embarked in the last few years on a mission to increase the number of native Saudis living in Saudi Arabia encouraging Saudi women to have 10-12 children each. That baby boom puts a strain on Saudi social services. So the Saudi's domestic policies too are being impacted by low oil prices.... But honestly guys and gals- if we hold energy or OS stocks for 1-5 years, we are going to make a bundle of money.....The energy industry moves in long up and down waves just opposite tech stocks. And every company has slashed its cost structure literally to the bone. So profits will spring forth quickly when crude prices firm even only 2-3 US Dollars/bbl...

To: Mike from La. who wrote (37872)	2/20/1999 9:50:00 AM
From: katy hohmann	Read Replies (1) \| Respond to of 95453

Miller Exploration (MEXP) had a substantial drop on huge volume yesterday. Any clues? Thanks. Katy

To: Mike from La. who wrote (37872)	2/20/1999 11:17:00 AM
From: thomas hayden	Read Replies (4) \| Respond to of 95453

Mike from La., I read the article you posted about Russia saying OPEC doesn't have the influence it used to in controlling oil prices. It made me very nervous reading that, because I'm sure Saudi knows that their influence is greatly diminished. I'm starting to subscribe to the conspiracy theory. For Saudi(and Opec) to regain their influence they have to price everyone out of the market. The way to do it is drive prices to $8. All of the mom and pop producers will be gone. Half or more of the drillers. If oil went to $8 and stayed there for say 3 years, where would FLC, GLM, and RDC be ... I suspect gone, goodbye, don't forget to write. Saudi may very well say you know its worth 3 years of pain for 25 plus years of controlling the market. I'm sure they have discounted the cash flows to say this is what we'll lose and this is what we will gain by taking such action. I also think the Saudi is the only one with the balls and financial muscle to take such action. A good excuse is for Saudi to say no one else is complying we aren't either. Say they crank up production another million barrels a day. Oil starts rapidly heading for $10. Saudi has the outside investments to sustain lower oil prices. Everyone howls, but Kuwait, Iran, Russia, etc has to also increase their production to make up for short term lost cash flow, all of a sudden we are at $8 dollars a barrel or lower. And then every oil company in the world is screwed. I don't want to think it could happen, but it truly can, and then all of us are SOL. Something to ponder.