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

To: diana g who wrote (43247)	4/26/1999 10:02:00 AM
From: The Ox	Read Replies (1) \| Respond to of 95453

Since we are seeing profit taking in the sector today, does anyone want to through out entry targets for the larger OSX stocks, SII, SLB, HAL, CAM, WFT, etc.......

To: diana g who wrote (43247)	4/26/1999 11:48:00 AM
From: Douglas V. Fant	Respond to of 95453

diana, IMO majors will build cash for six months in order to make sure that they can funds current capital expenditure programs and pay dividends. Then in late 1999 they'll look at revising capex budgets at least related to drilling. Well rework operations are left more to local level decisions. Now the exception to the above statement relates to discretionary funds always budgeted in January 1st in each business unit's capex budget. Now on capex budgets, there are usually two types of funds- absolutely committed funds- and "redlined funds". The business affiliate will get the absolutely committed funds in 1999 no matter what. "Redlined funds" are released by the Excomm if you "do well" with your initial capital fund expenditures in 1999- drill good wells or rework current wells for e.g. Now I did point out that our profitability dramatically swung to the positive in my business unit in March. That improved cash flow from projects will help influence partly the various Excom decisions around the oil patch on "redlined funds" for 1999. So in summary capex budgets will not change much for 1999. Howeve improved cash flow from improved prices may cause the release of some of the "redlined funds" in current capex budgets..... That should cause a gradual, but steady (if prices stay where they are within a dollar or two/bbl) increase in service work for the rest of 1999 I would guess...