Shipping - Oil & Gas Tankers, Dry cargo, LNG Message Board

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Non-Tech : Shipping - Oil & Gas Tankers, Dry cargo, LNG

GLNG 38.41

-2.0%

Nov 7 9:30 AM EST

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To: Don Hurst who wrote (289)	3/8/2010 6:51:56 PM
From: E_K_S	Read Replies (1) of 2660

Hi Don - Yes $11.00/share is possible especially if Baltic rates continue higher. At one point I had a $55.00/share target but with the share dilution that is now around $13.75/share. It was around $27.50/share with 100% of the Ocean Rig revenues, so if you cut that back down by 50%, that is where I get the $13.75/share number. So, for me the wild card is the contribution by Ocean Rig and how much of their revenues contribute to Drys overall total. It's hard for me to forecast because every time I analyze it, the Ocean Rig participation number has changed because of new ownership interests. Drys shareholders really have no voting interests as they now hold a minority (and some what passive interest)in Ocean Rig. We pay the debt and huge downside and give away the upside. You might also look at SFL as they have a 100% ownership interest in one deep drilling Rig with FRO. I think FRO acquired the other buying out SFL's interest late last year. SFL has a very specific revenue sharing agreement with FRO that is above and beyond the lease back agreement. There is chatter that another deep drilling rig purchase is in the works. SFL will finance it and have an equity and/or profit sharing arrangement similar to their other agreements. These are huge dollar commitments, well over $1 billion dollars. I own 10x the position in SFL than Drys. The dividend that SFL pays (over 7%)is not too bad either. I also own a similar dollar position in ULTR as I now own in DRYs. I believe ULTR has a slightly better per share upside than DRYs. With a $12-$15 per share target for ULTR vs $11-$13 per share target for DRYs. ULTR has their River Business as the wild card while Drys has Ocean Rig as their wild card. I posted some comments on the Yahoo message board about ULTR vou can read if you are interested. finance.yahoo.com To summarize, I hold SFL, DRYs and ULTR. My long term price targets for all three are higher. I would begin selling my SFL shares if I see $25.00/share again. My last sale for SFL was $29.00/share in May 2008. My last Buys were in ULTR and SFL in Feb 2010. I continue to hold DRYS at current prices and might add shares if it trades below $5.50/share and there is more clarity on the contribution Ocean Rig provides Drys. EKS

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