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: Cragganmore who wrote (35328)	1/18/1999 6:01:00 PM
From: shust	Read Replies (3) of 95453

INTERVIEW-Global Marine feels urge to merge HOUSTON, Jan 18 (Reuters) - Offshore oil driller Global Marine Inc. said on Monday it was looking for a merger or acquisition deal that would create a clear industry leader. ''You'd want to do it in such a way as to create the most attractive, superior vehicle on the planet in terms of offshore drilling,'' company president Bob Rose told Reuters. In a telephone interview, Rose said the fragmented drilling industry had failed to keep up with the wave of consolidation in the oil exploration and oilfield service businesses. Rose noted that drilling contractors' stock prices had fallen sharply last year in tandem with the slump in world oil prices. This meant drillers' assets could be bought on Wall Street for one to two thirds of their replacement cost, providing a powerful incentive for mergers and acquisitions, he said. Global Marine was only interested in partnering with drillers who had a premium fleet and a strong balance sheet, Rose said. The combined entity emerging from such a deal would have the financial strength to pursue further consolidation of the drilling industry and this could also include a hostile takeover at some point, he added. Rose declined to name any potential merger partners or say if the company was currently involved in merger talks. Earlier on Monday Global Marine reported that worldwide rig rental rates fell in December for an eighth consecutive month. Daily rental rates in December were 29 percent below the levels of December 1997 with little prospect of an improvement this year, the company said. Rose told Reuters that a backlog of deepwater drilling orders worth $1.3 billion would enable Global Marine to ride out even a very long slump in the oil drilling business. ''We certainly see no scenario in which we will not be profitable in 1999,'' he said.

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