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: pls418 who wrote (88434)	3/10/2001 3:59:42 PM
From: Tomas	Read Replies (1) of 95453

FGH on ropes in punch up over rigs Upstream, March 9-15 The fate of troubled US yard group Friede Goldman Halter remained uncertain this week as its stock tumbled, its creditors circled wagons and a key client filed for arbitration, write Erik Means and Blake Wright. FGH stock, which traded at $6.40 just a month ago but closed at $2.75 on 28 February, fell even further after its surprise decision on 1 March to stop work on two deep-water semi-submersibles for Ocean Rig of Norway. About 1000 yard hands are without work as a result of the dispute, which involves Ocean Rig's refusal to increase overall payments. Ocean Rig filed immediatey for arbitration in London and FGH saw its stock plummet to around $1.60 by mid-week. Ocean Rig -- whose entire business revolves around delivery and operation of the two new semisubs -- also suffered as its shares fell more than 18% during the week. The yard and the rig owner have been at odds on the heavily delayed order for the twin Bingo 9000-design semisubs. Ocean Rig chairman Bjarne Skeie said FGH's attempts at what he called "blackmail" would fail and hinted his company was ready to cancel the contract and move the Leiv Eiriksson and Eirik Raude to another yard for completion. "This is just a mess," one US onlooker bemoaned. "They (FGH) won't talk to anybody. I think the first rig must be done. I think that once they deliver the rig they lose their leverage, so they are hanging on to it to try and get more money." The source added: "They've lost a lot of credibility and they are under a lot of financial stress. Can you imagine a drilling contractor giving them a contract now?" Dark clouds continued to gather this week as FGH said it was in negotiations with lenders who allege the company has violated loan covenants under its $110 million credit facility.

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