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

To: Wowzer who wrote (41941)	4/9/1999 10:33:00 AM
From: articwarrior	Read Replies (1) \| Respond to of 95453

Crude up.....$16.23 and climbing. eom

To: Wowzer who wrote (41941)	4/9/1999 12:35:00 PM
From: Big Dog	Respond to of 95453

Re the Simmons article...which I will include in the ODB newsletter this wknd. As I posted a while back, I met with Matt Simmons a couple of weeks ago. He and I talked about most of the things mentioned in this article. This is really nothing much different than he has been saying for some time. He has long been a voice on the issue of depletion....and I agree with his view. Matt is also the one who called for 450 offshore rigs to be built over the next 10 years. He is an eternal bull on oil. And some people scoff at this predictions. However, I think his forecasts are firmly rooted in reality and not based on the daily wind of the market. He is dealing in numbers, not in sentiment. As we all know, the world can change "face" in much less than a 24 hours period. That is what will happen one day in the oil business. You will wake up the next morning and everything will be different as it relates to oil. That day will come. But in the meantime, it makes sense to ride the cycle -- buying on dips and selling on strength. You will never know when that quantum change will occur, so it makes sense to make some cake as you can. big loosbrock.com

To: Wowzer who wrote (41941)	4/9/1999 2:27:00 PM
From: Mike from La.	Respond to of 95453

Rory, To save myself some effort, I dug up an old post of mine, which pretty much covers it. Today my opinion is the same, but more so. To: David R. Hayes (36111 ) From: Mike from La. Thursday, Jan 28 1999 5:19PM ET Reply # of 41973 Actually, I don't think things are as grim as they appear. The earnings reports we are seeing are a result of the low oil prices we've been seeing for months. They should be no surprise, though they are still shocking,and are producing some reaction. As I think Doug pointed out a while back, the companies are loading all their write-offs and other bad news now, since no one expects much anyway. Might as well get all the bad news out at once. What we are seeing are the results of low prices, not the cause. Witness the slow rise in oil prices over the last few weeks, in spite of a lack of OPEC agreement, and a warm winter. The effects of low prices are starting to be felt in the form of lowered production. I saw an article last week which stated that Canada has lost over 500,000 barrels of production, and we see here a steady stream of complaints about marginal well shutins and small independents going down. Combine this with the projected cutbacks in e&p spending from the large players (although some are increasing their deepwater budgets such as CNG),and we are looking at some big time reductions in production, which will not be reversed quickly, even if oil went straight up. Just can't go out and rehire laid off people, generate huge e&p budgets with low earnings etc. I read that the huge Russian oil company Gaspah (spelling)lost 2 billion dollars last year, and is planning to lay off 10% of its workforce. Unheard of in Russia. Texaco, in their earnings report said that it's 1999 oil and gas production will drop 1-2%. I think the gradual rise we are seeing in oil prices is this process starting to work, with or without OPEC cuts. The projected cuts in 1999 e&p budgets are huge, and will be felt more every week, as depleted wells' outputs are not replaced. Rough figures are that oil wells deplete at about a 30% rate, and gas at around 40. This depletion cannot be replaced without drilling, which is not happening. The far East is showing signs of recovery, and there are already estimates of rising oil demand starting sometime in 1999, and accelerating after that. These two trends, decreasing production, and increasing demand are going to intersect, maybe sooner than people expect. Just need to hunker down, the emotional response to negative earnings reports will pass quickly, and the attention will again focus on oil prices. I've been buying, mainly FGI, based on the solid opinions expressed on this thread that their earnings are going to be strong. DO beat last year's earnings, that will show up soon. My guess is that attention will focus first on what Chavez does, then later, on OPEC. But oil prices will continue it's climb, regardless. News events will just produce short term violent reactions, in an overall upwards movement. Good luck. Mike