Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Think4Yourself who wrote (68661)	6/23/2000 8:25:00 AM
From: Big Dog	Read Replies (1) of 95453

Lehman on ESV this morning: Management continues to see very strong demand for its 22-rig jackup fleet in the Gulf of Mexico. Day rates on contract renewals are rising ? in many cases significantly ? and utilization of the fleet is 100%. ú For the company?s 350-380 foot slot and cantilevered rigs, day rates are moving into the mid-$40,000s. The 300-foot independent leg jackups are receiving day rates in the higher $30,000s. The 250-foot independent leg jackups are now in the low-to-mid $30,000s. ú According to our sources, the company?s average day rate for its 22 jackups now stands at $31,450. Based on contracts now signed and where we believe the market is, we expect its Gulf of Mexico jackup fleet to average $35,590 in the third quarter and $39,550 in the fourth quarter. ú This is significant because each $1,000 increase in day rates for its jackup fleet in the Gulf of Mexico means about $0.04 per share on an annualized basis. ú Reflecting the strength in day rates, we are boosting our 2000 EPS forecast to $0.55 from $0.50. Our 2001 and 2002 estimates are $1.60 and $2.75 respectively. ú We continue to recommend purchase of the stock.

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