Gary,
SESI P&A business is DEAD and will continue to be a money drag on earnings
as will all the merger expenses.
Both SESI and Cardinal will be diluting stock... that's why SESI wants to
increase authorized to 100,000+ shares - convertible preferred and warrant DILUTION!!
<<In March, 1999, Cardinal completed an offering of $5 million of equity
to current holders of its capital stock, and prior to the closing of the
Merger will complete equity offerings on a private placement basis of an
aggregate of $45 million to current holders of Cardinal capital stock or
other institutional investors. All of the net proceeds of the combined $50
million equity contributions will be used to reduce Cardinal's indebtedness
at the closing of the Merger. Prior to the closing of the Merger, Superior
will obtain a new credit facility in a principal amount that will produce
proceeds sufficient to repay or refinance outstanding Cardinal and Superior
indebtedness.>>
SESI will probably earn 4, 5, 6, 7 cents per quarter this year - oil drilling budgets won't be rewritten until next year... additional business for Cardinal-SESI will accrue very slowly.
Valuations: 0.22 x 18= $3.96 per share value for all of '99... about where its headed now. Unless FIRST RESERVE FUND pumps funds into SESI in Q2, SESI remains at ~$4.00.
Mr. Hall has continually taken advantage of SESI shareholders with his huge salary, personal bonuses, and free giveaways - first to PKD and now to FIRST RESERVE shareholders. He has been promised the CEO position of the new Cardinal-SESI... but only until he delivers the goods. Once SESI is in Cardinal's pocket... Mr. Hall will be fired!!
Hope SESI gushes to the moon - but will probably just stay stuck in the mud. Right now the oils are being heavily manipulated - SESI will be dragged down with the rest of the sector - the world is awash in oil and will be for the next 5 years no matter what all the "studies" show about world oil demand.
At the end of this year, early 2000, Cardinal-SESI may be a $5.00 - $7.00 dollar per share stock... but definitely a long term play ONLY!! I wish it would get back to $5.00/share then I could, at least,
stay in action on margin. How boring... 'Hello MM's?' <ggg>
IMO, n
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