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: JungleInvestor who wrote (41463)	4/1/1999 1:01:00 PM
From: IndioBlues	Read Replies (1) of 95453

Well the stakes are getting higher aren't they. Remember too that MOB found a lame-ass excuse for cancelling the Jack Bates late last year. From the sounds of FLC 10K <see below>, it doesn't sound like FLC is going to roll over (maybe can't afford to let the day rate go?, but may have no other choice if the Vastar program is thrown into the mix. Any comments BigDog? I know drillers don't often sue their clients ... From 10-K: "In December 1998, Mobil U.K. Ltd. ("Mobil") terminated its contract to use the Company's Jack Bates semisubmersible rig on the grounds that two of the rig's anchor cables broke. The contract provided for Mobil's use of the rig at a dayrate of approximately $115,000 for the primary term through January 1999 and approximately $200,000 for the extension term from February 1999 through December 2000. The Company does not believe that Mobil had the right to terminate this contract. The Company has received a proposal from Mobil to recontract the Jack Bates at a dayrate of approximately $156,000 for a one or two well drilling program. The Company believes this program may last approximately six months. This proposal is without prejudice to either party's rights in the dispute over the termination of the original contract. If the Company is not successful in settling its dispute over the termination of the original contract, the Company intends to commence legal proceedings to enforce its rights under the contract. The Company believes that it will be able to find other work for the Jack Bates, but that any such work will be at lower dayrates than the $200,000 dayrate established for the extended term of the original contract."

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