Dain Rauscher Wessels Poll Shows Energy Executives Expect Oil, Gas Prices to Remain High Through 2001.

Business/Energy Editors

Dain Rauscher Wessels Energy 2000 Conference

HOUSTON--(BUSINESS WIRE)--Sept. 20, 2000

Gas, oil and natural gas prices should remain high for the next year, energy experts predicted in the second annual Dain Rauscher Wessels Energy Prices Survey.

Buoyed by the highest gas and natural gas prices on record, energy experts predicted that energy prices will remain near the current levels and energy company stocks will remain good investments, according to the poll that was conducted at the eighth annual Dain Rauscher Wessels Energy Conference in Houston. By comparison, one year ago survey respondents were more skeptical about energy prices remaining high and predicted that oil prices would drop in the year 2000.

"Optimism is very high in the energy sector," said Jim Wicklund, managing director and head of energy research at Dain Rauscher Wessels. "This is a group that has seen this market through many ups and downs. For energy investors and executives to be this bullish is quite a statement about prices."

Wicklund pointed to many reasons for this optimism -- OPEC solidarity, a booming world economy and slowing worldwide production.

Oil prices were predicted to retreat slightly from the current price of $36.52 per barrel to $32.70 by the end of this year with an average price for the year 2001 placed at $28.80. By comparison, the price of a barrel of oil one year ago was $24. "The recovery we saw in the oil patch one year ago is in full swing," Wicklund said.

The poll also found that the vast majority of respondents believed that crude oil production would increase over the next year by an average of 3.0 percent.

The energy experts were confident about investing in oil stocks, as measured by the Oilfield Service Index (OSX). A majority of respondents predicted that the OSX would continue to outperform the S&P 500 over the next year. And they predicted the OSX would move up slightly from the current 133 to 137.9 by the end of the year and to 147 by the end of the year 2001.

"If you look back, the index is nearly triple its low point of 47.4 on March 1, 1999, so there is definitely optimism that the current recovery will continue," Wicklund said.

When asked about the price of natural gas, respondents predicted the price would increase from the current $5.28 per million cubic feet to $5.50 at the end of this year. They also predicted the price would drop back to $4.60 by the end of 2001. By comparison, one year ago, the price stood at $2.68 per million cubic feet.

"Natural gas continues to be the commodity people are most bullish about," Wicklund said.

The group also took a stab at the next merger companies. For the second year running, Chevron and Texaco were the favorite pair for a successful marriage of oil companies. More than 30 companies made the list, but those two companies were included in more than 20 percent of the survey responses.

On the individual stock front, the group was asked to give the best energy stock returns over the next year. Key Energy Group and Exxon-Mobil led the group, followed closely by Enron. "That's lofty company for Key Energy, but it has outperformed the other two over the past year, giving it an edge on momentum," Wicklund said.

Attendees were also asked to predict the presidential race. Not surprisingly, George W. Bush came out on top, but his margin was a relatively slim 53 percent to 47 percent for Al Gore. "That doesn't overwhelm anyone with confidence in Gov. Bush," Wicklund said.

The poll was taken of 135 energy participants including industry experts, company representatives, and institutional investors who came together at the Dain Rauscher Wessels Energy Conference for a four-day conference about the industry's future. Respondents were asked eight questions about oil and gas prices, stock performance and energy companies likely to merge.

For a copy of the survey and the raw results, contact Dain Rauscher at 612/313-1234.

Dain Rauscher Wessels, a division of Dain Rauscher Inc., includes equity research, equity trading, institutional equity sales and corporate finance. The division's 38 analysts focus on five industries: consumer, energy, financial services, health care and technology. Currently, the analysts follow more than 400 companies. The division, which employs 425 people, has offices in Atlanta; Austin, Texas; Boston; Dallas; Houston; Menlo Park, Calif.; Minneapolis; New York City; Paris; San Francisco; Seattle; and Tel Aviv, Israel.(a)

Minneapolis-based Dain Rauscher Incorporated provides investment services to individual investors and small businesses through offices in 26 predominantly western states, investment banking services to corporations and municipalities nationwide, and trade clearing and settlement services to non-affiliated broker-dealers throughout the United States and abroad. Dain Rauscher Incorporated, one of the nation's largest full-service securities firms, is a member of the New York Stock Exchange and other major securities exchanges, as well as the Securities Investor Protection Corp. Dain Rauscher Corporation, its holding company, trades on the New York Stock Exchange under the symbol DRC. The company's headquarters are located at Dain Rauscher Plaza, 60 S. Sixth St.

(a) Strategic alliance with Tamir Fishman & Co.

This press release and the information contained herein are not intended as a recommendation of any particular security, industry group or trading strategy and should not be construed as a recommendation or other analysis that provides information reasonably sufficient to base an investment decision. Dain Rauscher Wessels makes investment recommendations only through its research analysts, sales personnel and other authorized registered representatives.