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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Wowzer who wrote (46604)6/21/1999 8:08:00 AM
From: BigBull  Read Replies (2) of 95453
 
All: The HOFF article in Upstream Newspaper

The article is real and I have read it. It is dated May 29, 1999. The author is Whit Smith.

My paraphrase of the article:

By means of introduction the author states in general terms that the offshore construction industry has not been hit as hard by the recent E&P capex cuts. Additionally he states that Wall Street will be attracted to companies in this business because they are a “pure play … in the development and operating phases of the oil and gas field lifecycle.” HOFF is becoming a major player in the business as it has recently purchased its 10th vessel and has expectations of acquiring another by year-end.

I will now enumerate what I feel are the key elements of the rest of the article.

1.) Awarded “high profile” contracts in the GOM.
2.) 1st quarter was weak but business is picking up. Only had 4 bids out in the beginning of the year. They have 20 out now.
3.) The 20 bids are for $100 mill worth of work – 35% in GOM, 65% international.
4.) Company currently has $32.5 mill of backlog compared with $16 mill last year.
5.) Companies business is rapidly expanding over seas – 100% of last years backlog was domestic, this year 60% is international.
6.) Awarded the high profile contract for laying the pipe on Exxon's Dianna/Hoover project. This project involved 20” pipe in 365' of water up to 224 kilometers out.
7.) On Exxon's short list, and now on Shells list as well.
8.) Has “alliances” with Norway's DSND and Cal-Dive.
9.) J Ray McDermott has abandoned shallow water in GOM (for the most part) leaving HOFF and GLBL as the two main competitors there.
10.) HOFF has gained market share on GLBL in depths where both compete.

This is FYI only. I own the stock and will buy more on weakness. This company's main problem, imo, is recognition on Wall Street. In my own small way I am attempting to alleviate this problem. If you believe that we are in the beginning stages of a major up cycle in the Oil Services industry (as I do), then this little gem deserves consideration for your portfolio – before Wall Street “discovers” it. This company has moved up fast to become a major player in it's niche. One last factor in it's favor - NO RIG CONTRACT CANCELLATIONS (Yipee). This is all strictly JMVVHO. DO your own DD.
Bull
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