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TWST: What do the valuations look like now? And if you are recommending any of these stocks, what kind of time frame should an investor have, Magnus?

Mr. Fyhr: At Jefferies we believe this is an under-owned group. There are very few public companies that you can play this sector in. Given that, we have seen rates improve for VLCCs from 15,000 a day to 70,000 a day recently. So a lot of investors think we’re way ahead of the cycle. But I think we’re only in the early stages of the cycle in that, unlike the previous cycles which have been basically 12 months to 18 months, I think this cycle is actually a two- or three-year cycle, given the limited supply coming on the market over the next two years. So for investors right now, I think a one-year investment horizon is definitely something that is very attractive.

TWST: Magnus, any comments on the deliverability of natural gas?

Mr. Fyhr: As I said earlier, given the fact that we’ve gone from 500 rigs running in the United States to over 1,000 rigs running, with about 800 of those drilling for natural gas, we’re not doing a very good job in adding to the existing production. We’re running on a treadmill, and it’s going to be very interesting to see over the next 12 months how that develops. We haven’t really had a normal winter in the last three years, and if for some reason we have a normal winter this year, I think there could be a very tight market. We definitely need to step up the exploration in the United States to improve deliverability.

TWST: Magnus, “not much and not soon” for capital spending by the majors.

Mr. Fyhr: I agree. We are seeing some early signs that the majors are stepping up their spending. The international rig count started to move up very nicely last month, and in our view that’s a positive. But they have definitely been very disciplined, and they haven’t really committed to much spending compared to what they did in 1997 and 1998. I think that once they start ramping up their spending, that will be a time when we would look to take profits in the drilling sector.

TWST: Magnus, you talked about it earlier, are there other opportunities you’d suggest to investors?

Mr. Fyhr: I’d also like to mention the later-cycle plays. We also like the drilling companies with exposure to international markets. Both Pride Companies (OTC BB:PRDE.OB) and Parker Drilling (NYSE:PKD) are on our buy list. Pride is the largest drilling company in South America with more than 200 rigs on that continent. In addition, the company has exposure to the Gulf of Mexico and deepwater exposure in West Africa. We believe increased drilling activity in South America could be a catalyst over the next 12 months. Also, the stock is trading at a significant discount to the rest of its peer group.

TWST: Is anybody in your group following Wall Street’s advice and buying back shares?

Mr. Fyhr: I think that as cash flows are poised to improve over the next few years, both the drilling companies and the shipping companies will have significant cash flow. Currently, though, the stock prices are up significantly, and I think more of the cash flow will be used to address some of the capacity issues in the market, since it is a very capital-intensive market, and they’re probably more poised to reduce the debt on their balance sheet.