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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Czechsinthemail who wrote (14770)3/13/1998 6:36:00 PM
From: Lucretius  Read Replies (1) of 95453
 
Correct, they are negatives in the very short term for the drillers, but the way I see it... first in, first out. The earnings are solid, guaranteed when those rigs come out. Timing may be a bit of a disappointment sometimes, but all in all it's not that big of a deal.

I don't think delays are a prob for FGII unless they are on performance based K's in which time is a factor (higher overhead because the greater amt of time spent on 1 project instead of 2 for instance). More likely that weather, and higher salaries for rig workers will cost them more than anything else. Labor is definately going to be more expensive for them going forward. Same w/ the drillers if the fleets begin expanding greatly. NE for instance kept their turnkey operation going (even though many analysts have said to sell it) cause of the labor and engineers that they have in that division and the ability to move those guys to new projects in the K drilling business as the need arises. I'm sure others have done rthe same as well. My land and gas play for intstance, UNT, can't find crews to work 6 of its rigs!!! However, it may be the case that FGII is not in as bad a position as Halter is concerning labor (they definately aren't hurting on space. In addition, FGII is international (France, and Canada) so they have a larger pool in which to pick labor from.

-Lucretius
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