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

To: tdl4138 who wrote (38935)	3/4/1999 2:28:00 PM
From: Platter	Read Replies (1) \| Respond to of 95453

Shares of oil service firms sparked by $13/bbl oil NEW YORK, March 4 (Reuters) - Shares of oil service companies rose in early afternoon trade on Thursday after oil futures jumped over $13 a barrel for the first time since early January. Oil for April delivery rose as high as $13.50 a barrel in intraday trade on the New York Mercantile Exchange (NYSE), up 57 cents from Wednesday's settlement. Prices were driven by U.S. investment funds, which stepped into the market to cover for the possibility that OPEC might decide to cut output at a meeting later this month. The oil rally sparked higher prices for oil service stocks, which have languished in response to 12-year lows in oil prices and widespread cuts in big oil spending. Strength in the NYMEX offset a Merrill Lynch report early Thursday. The report forecast lower earnings for three key firms, including BJ Services Co. <BJS.N>, Halliburton Co. <HAL.N>, and Diamond Offshore Drilling Inc. <DO.N>. Merrill Lynch analyst Kevin Simpson cut his earnings estimates for firms for 1999 and the year 2000. He cited a general decline in spending by oil exploration companies, which use drills and other equipment provided by oil service firms. Simpson cut his estimate for BJ Services' fiscal-year 1999 earnings per share to $0.35 from $0.60, and reduced his fiscal-year 2000 EPS estimate to $0.90 from $1.05. He also cut his estimate for Halliburton's fiscal-year 1999 EPS to $1.05 from $1.25, and reduced his fiscal-year 2000 EPS estimate to $1.40 from $1.60. Simpson lowered his estimate for Diamond Offshore Drilling's fiscal-year 1999 EPS to $1.45 from $1.50, and reduced his estimate for the company's fiscal-year 2000 EPS to $1.50 from $1.65. The Merrill Lynch analyst, however, retained his "intermediate" and "long-term buy" ratings on all three companies. "Near term, there is still a risk of new oil service lows if OPEC does not cut at its March 23 meeting and oil prices break down to new lows," he said in the report. "Even so, we think the risk/reward for investors with 12- to 18-month horizons is very favorable with the share prices at such depressed levels," he added. BJ Services' shares rose about 1-1/8 to 15-7/8 in early afternoon trade on the New York Stock Exchange. Shares closed at 14-3/4 on Wednesday. Halliburton's shares rose 1-3/4 to 32-1/4 by early afternoon Thursday. Shares closed at 30-1/2 Wednesday. Halliburton also announced on Thursday it would combine two business units as part of a three-year plan to consolidate its diverse holdings. Diamond Offshore Drilling's shares rose 1-5/8 to 23-5/8. Shares closed at 22 Wednesday. Another major oil service issue, Schlumberger Ltd. <SLB.N>, rose near four-month highs. Shares rose to around 55-1/16 on the NYSE, up 3-5/16. Other movers included Smith International Inc. <SII.N>, which rose 2-3/8 to 29-1/8. Triton Energy Ltd. <OIL.N>, an energy property developer, rose 11/16 to 6-1/8. Pride International Inc. <PDE.N>, which also rose 11/16, was at 6-1/8. Ocean Energy Inc. <OEI.N> rose 1/2 to 4-5/8 on Thursday.