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

To: Thomas M. who wrote (41973)	4/9/1999 3:30:00 PM
From: Aggie	Respond to of 95453

Thomas, hello. I can sum it up very quickly: rig rates. For example, the same rig which was bid to me at $90K just last October was just recently bid at $35K. This has the potential of shaving off a couple million from the AFE's, making a prospect a whole lot more attractive, especially if you believe that oil prices will rebound. Our industry is driven by bean counters these days, and they all wear 1-year blinders with 1-quarter eyeshades firmly in place. Top executives write their contracts with bonuses paid on either quarterly or yearly performance, with additional bonuses paid on specific project targets. But nobody figures on being around long enough to see a full cycle - and because annual reporting drives a stock's popularity - well, you can see how beholden these companies are to a short sighted mangement structure. On the other hand, a visionary with a bit of snap will sieze this opportunity to structure a 3 - 5 year drilling program on the currently available dayrates. What will Mr. Derr get out of it? Probably satisfaction and little else. Regards, Aggie