Picking Up the Pieces

[steve2470]

http://www.smartmoney.com/onedaywonder/index.cfm?story=20050829

By Will Swarts Published: August 29, 2005

KATRINA'S WAVES HAD some oil-services investors walking on sunshine Monday.

Shares of Global Industries (GLBL) jumped 13% to $12.02 on expectations that the Category 5 hurricane that barreled through the Gulf of Mexico created plenty of work for the company that specializes in repairing oil rigs and underwater pipelines. While it's too early to assess the damage, some analysts are already putting a price tag upward of $16 billion, which would make Katrina one of the costliest storms ever to batter the U.S.

The advances weren't limited to Global's stock, which hit a four-year intraday high of $12.50. Shares of Cal Dive International (CDIS), which makes its money doing undersea construction for energy companies, gained nearly 6%; Oceaneering International (OII), a provider of underwater inspection and repair services, climbed more than 4%; and Offshore Logistics (OLG), which ferries workers and equipment to offshore rigs by helicopter, jumped 6%.

The potential scope of the hurricane's impact can't be underestimated. The Gulf of Mexico is the site of 28% of domestic oil production and 23% of natural-gas production, according to the Department of Energy. About 47% of the nation's refineries are located in the region, though not all of them were caught in the path that Katrina took through Louisiana and Mississippi. Even if surface rigs and refineries weathered the barrage of wind and rain, it could be days before the health of the undersea pipelines that ferry the oil and gas between them is determined.

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