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

To: Big Dog who wrote (44465)	5/11/1999 9:49:00 AM
From: Razorbak	Read Replies (2) \| Respond to of 95453

Alright, I'll take a look at it.

To: Big Dog who wrote (44465)	5/11/1999 10:22:00 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Drilling Utilization Forecast from Canada/Lehman Brent forecast...fwiw biz.yahoo.com RESEARCH ALERT-Lehman raises Brent crude forecasts LONDON, May 11 (Reuters) - Lehman Brothers on Tuesday raised its average forecasts for Brent crude for 1999 by eight percent to $15.25 per barrel and for 2000 by five percent to $16.50. Increases after the first half of 1999 reflect ''large, long speculative positions and one-off issues,'' said Lehman analysts in a note, adding their fundamental view for the second half of 1999 is ''essentially unchanged with price upside limited.'' ______________________________________________________ biz.yahoo.com Monday May 10, 7:14 pm Eastern Time Canada oil service firms cut drilling forecast (( ''We're not expecting drilling activity to pick up until the last quarter of this year,'' said Tim Polk of the Canadian Association of Oilwell Drilling Contractors. ''Oil companies are waiting to see if these higher prices will stick. Until then, they'll take the extra cash they are making to pay down the debt they took on over the last two years,'' Polk said. PSAC also said it expects the shift to gas from oil wells drilled to continue. It projected the number of gas wells to be drilled in Canada's western provinces this year to rise by 8 percent to 4,990, while the number of oil wells is seen dropping 29 percent to 2,187. )) ----------------------------------------------------------------------------------------------------------- An important concept here is the ''sustainability'' issue. It doesn't matter what ''we'' think; and to a point, it doesn't matter what the Oil Majors ''think'' about nearterm Crude Prices; as they will caution even their own optimism over crude's future, with prudent fiduciary duty - period. It is their job and it is their history; it will not change, they will not open the spending floodgates here. Rather their conservative business approach and prudent management of their business virtually dictates that they do as the article suggests, use the new revenue from increased commodity prices to pay down debt and repair their balance sheets. Q4 keeps popping up as to when the actual activity levels will increase via actual Cap Ex spending in reaction to these prices....as such I still favor heavy weighting to E&P's who are reaping tremendous leverage on earnings and cash flow on each .10c of Gas increase & $1 Boe over last years levels... the next 6 months for the E&P's if prices hold, will be huge upside fundamental gains in earnings & cash flow. Some of the OSX companies are burning cash here if Cap Ex spending does not increase. Some companies like FGI, GIFI, UFAB have backlogs to carry them through 1999; but the backlogs that were once their strength, will potentially be their achilles heel by December. The laggards look good to be building positions in - primarially 2nd , 3rd tier companies; or companies like RIG PGO FLC which seem to be discounted to their OSX peers... I feel uncomfortable buying anything else at these levels and even with not having taken some profits here.... There is NOT a powerfull case for shorting here - we are treading water - not good, not bad... Stocks like CAM look reasonable in the mid $30's - in the low $40's look like short's - but here, seem fairly priced. We need either a move to $19-20 Oil, or increased rig utilization, dayrates and new equipment orders soon. As the Major Oils & Independants are on record to saying that isn't going to happen untill late 1999-2000 - it becomes paramount to be a stockpicker here.... The $64 question here is; will the Street keep moving OSX stocks up from here - all based on the given positive future expectations, or at the least, will the Street keep prices in the OSX stocks supported here, or at the worst, will they take profits here, slowly leading to a slow bleed retracement more from lack of buying support vs. any type of panic selling ? It matters NOT so much as to if your ''theory'' is correct; as to how you execute your trading/investing plan; and most importantly, how you react to the markets actions/reactions.... More money is made by trading the market than by being right in theory - and we all, including the Oil Traders, Analysts, Major Oil co, CEO's - ''all'' must guess/bet to a degree of where crude goes... Personally, the ''guess'' on where crude prices go, is NOT what will make you money; what will make you money is ''guessing'' correctly on how both the Major Oil's and the Market will ''react'' to where Crude prices go/don't go... PS - buying FLC RIG PGO into any dips here; (will not miss the OSX boat if we pop ) as low as the market wants to take these 3 - averaging in in 2-3-4 buy ins fwiw . My main fear here is that the OPEC compliance either shows a drop in compliance in June (Quatar,Ven. cheating), or that continued 80%+ compliance becomes old news - and the vacumn of a lack of good & ''new'' - news just bleeds us slowly to a retracement to OSX 65-68ish ? bwdik.