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: Big Dog who wrote (38363)	2/26/1999 9:38:00 AM
From: SliderOnTheBlack	Read Replies (2) of 95453

"Convertible Dog'' - don't disagree with what you are saying - but, This is a historically tight Financial Market right now. There are major players in the Banking Bizz that can't get a ''dime'' due to a still relative liquidity crisis. Credit/Liquidity has ''NEVER" been this tight in Corporate High Finance imho. Also, I think that the Convert's and dilution is why FLC sold off of late; everyone who ''did the math'' knew - BK was not even a nearterm factor - not even close. Super strong cash flow even in beyond the worst case model of any analyst out there. Still profitable etc... While it's not great new, nor even good news; imho - it's no longer even news - as it was fully factored into the shareprice of late. What FLC will do; is use it's industry leading leverage position to ''re-do'' the debt maybe 9-12-18 months from now; as their cash flow and earnings will be upside leveraged to expected rising Oil/Gas prices and resulting drilling activity... they will have not only have a better ''Banking/Financial market'' in which to negotiate, but a lot more cash to work with... While FLC is hardly the posterchild example of a ''Widow & Orphans'' Drilling Stock - that's not at debate here; what is imho; is that the Market presents the highest return opportunities in just these types of scenario's. The emotional downside over-reaction doom & gloom to the high debt companies offers disproportionate discounts to their inherent real value as opposed to other companies. If we return to $14+ crude prices within 18 months; Few, if any other Oilpatch company will have more upside appreciation leverage than FLC. Yes, if we stay in a 3-5 year window of $8-10 Crude Oil - it's 1929 in the 'Patch - but that is literally the bet here ! I get the highest odds on the FLC ''horse'' in a 18 month race towards merely a stable $12-14-15 Crude Price Enviroment... a bet/gamble sure; but then again, just being in the Oilpatch is a bet/gamble !

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