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: Razorbak who wrote (40523)	3/21/1999 8:55:00 PM
From: VLAD	Read Replies (2) of 95453

Razor, This Altman analysis is only a model. It totally ignores the fact that in the drilling sector the price of oil is the biggest force effecting a company that is highly leveraged as is FLC. I don't see a lot of middle of the road here. Either FLC goes bankrupt(I don't see that happening now that the price of oil has moved up and appears to be going higher) or the brains behind FLC have probably managed the most creative leveraged financing in the history of the drilling industry. I'm losing money on this one (need about 13.5 to break even) but I am confident that I not only will not lose a penny but also will see a nice profit in due time. FLC will shine in 99 so long as the OPEC players don't have a short memory and don't start cheating once oil starts hitting the $18.00 level. Hell we went from $10 to $15 oil in a very short time span. $18 is just around the corner. I think these countries realize the importance now not to cheat as the price of oil rises. I also think the bigger lesson is that they budget their economies on a pessimistic oil price so that they are not forced to sell cheap oil just to make ends meet.

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