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

To: Gary Burton who wrote (40399)	3/19/1999 11:43:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

GaryB - dejavu ---- I just bought OEI - and then returned to read this post..... I think OEI may have some substantial short pressure to be released when the merger occurs; ie: the arb play of shorting OEI - buying SGO on the merger announcement; allthough there was no great ''pop'' in SGO do to a deteriorating Oil price enviroment at the time of their intitial announcement. Fadel Gheit - prior to the original announcement of the merger had called SGO the single most undervalued asset in the ENTIRE energy sector - I rest my case. OEI acquires SGO for it's depressed stock - a steal. Oil & Gas Journal has an interesting series of articles on offshore Africa - OEI has excellent prospects there and SGO has a great asset base as well. The upside of these 2 companies in an $18 Oil price enviroment is mindboggling - if we get there; if not - still an oversold steal imho. << (debt even worse than FLC) >> ...this is what makes the E&P's here so intriguing and superior plays to OSX stocks imho; while FLC or other drillers can only cut cost so far, they are at the mercy of dayrates - to change their earnings and cooresponding debt ratios. E&P's are still cheap - if Oil prices stick here - then they are mathematical anomalies; they will not stay this cheap. Their earnings and cooresponding debt ratio's change immediately at ''the pump'' so to speak as Crude prices have risen 40% of late... The E&P's get an immediately positive CASH/EARNINGS move from this and the drillers must wait for dayrates to rise - (3-6-9 months ???) and the service companies must wait for new orders ( 3-6-9 months ??? ). Who knows how long untill Cap Ex budgets increase - new Rigs won't be ordered without that increase and higher dayrates.... E&P's live in the ''here & now'' and the stockprice move is lagging the Oil price move - but it will not for long... The single highest return opps in the entire energy sector currently are the high debt -high leverage E&P's who got hit the hardest on the Commmodity price decline and go up the fastest on it's rise. Currently - we can buy SGO/OEI less than when Oil was $10 and the fear of $8 was looming.... it won't be this way for long. OEI/SGO will sell assets and trim debt - their value will pop as institutions will return as these assets are sold...also - lots of shorts here. OEI/SGO will be a home run of the 3rd Level Upper Deck nature... RRC is a small cap pure Nat Gas play that is similar in its misunderstood - oversold debt situation, but both have ''excellent'' assets to sell - that is the key; having top assets to trim vs. dogs.... ...on a riskier/reward note: RRC as well - a buy here ( $2 1/4 - 2 1/2) and be patient. BEXP another - limit buy under $3 1/4 and wait to $ 4-5; I just bought CWEI at $3 - now bouncing near $4 1/2 and I will take 1/2 profit at $5 and the rest at $8 - $10 - these are great trading stocks (small cap E&P's). FEN I have a triple in since it's original Jan blowoff - it will double overnight from here on any new financing/asset sale news - they have a huge Australian Gas Play that also may lead to a 3-5 time return potential that is just the icing... risk - yes; but not indiciative of its price given the change in Oil prices of late. - this is an ''option'' price on a $8-$15 short term/ and prior price of $30-40 and future potential with Australian success could be as high as $48-60 in a $18-20 Oil enviroment down the road.... The stock at $2 here is priced like an ''option''... and should be judged riskwise as such...

To: Gary Burton who wrote (40399)	3/19/1999 12:13:00 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

UFAB on sale - I'm back in at $ 7 3/8ths as an initial 1/2 entry... SargeK - loaded with GIFI from the $6/7 range - would have to file ''as an insider '' if I bought any more <VBG> - so set a limit on UFAB - $7 3/8ths and got filled; will sit on another @ $6 7/16ths if we see that - (doubtfull)... A few dips/profit taking here is normal as we are destined for some post OPEC formal announcement letdown and selling on the news... that is a good thing however; as individual buying opps will occur. IIR is another little sleeper - check the Yahoo profile/good asset/value play here C'Mon $3.........little selloff on todays earnings announcement - lots of cash/no debt - sound familiar SargeK ? PS - they sell the ''Picks & Shovels'' of the Oilpatch - BUY - 1/2 today and 1/2 for a return to its lows if we see it - again, doubtfull. Solid, solid company - good International connections and sells to Middle East... I'd not be afraid to buy dips here ! Also, don't be afraid to take profits on high flyers and rotate into laggards/value plays. If I had ATW I would sell and buy UFAB/GIFI etc. - but, save some cash for a post OPEC meeting letdown - as the real ride will start off that dip imho - to a potential OSX 72 - and if ; and that's a big ''IF" - we get the media hype and either a selloff off of DOW 10,000 - leading to sector rotation; or a pop from DOW 10,000 we could get a rising tide to float all boats scenario; we win on either extreme imho; then we could irrationally go to OSX 85ish by end of April ! ...anyone dare look at last March to May run numbers ? the % gains were solid - seasonality ? I think so - we won't return to last years prices of course (due to earnings) but we will get the same % run up perhaps - food for thought; lots of stocks still cheap - GIFI UFAB; RIG $2 less than DO ? $4 less than ATW ? - not in ''my'' book it isn't.... FEN could dip sub $2 - set limits for the "Vegas'' types ...gotta go for the day; got my lines in the water (limit sells & buys) and will come back tonight to see if I caught anything .