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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: david james who wrote (12860)2/26/1998 9:05:00 AM
From: Big Dog  Read Replies (2) of 95453
 
David -- First, be leary of these companies that all of a sudden want to build drilling rigs. If they were even able to get a contract, the margin would like be pretty low since they would have to compete mostly on price with "real" yards that have been serving the drillers all the years...like FGII, Samsung, Hyundai, Daewoo.

Building a rig is no simple task and if you are a driller you don't want to take your 200 million dollar job to someone that is just coming to market.

But to answer your question, I can't. There are soooo many variables. The margin could range from 5% to 20%, depending on economies of scale and many other factors.

If you want to invest in a rig builder, go with the best. FGII.
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