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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Meridian who wrote (46894)	6/24/1999 8:24:00 PM
From: Sam Miller	Respond to of 95453

I think they will get equity capital or sell before bondholders will get a chance to force a conversion. Read what Moody's said. "The company's EBITDA generation currently is nil, having been hurt over the past few months by work delays due to temporary factors, and the next coupon payment ($5.4 million) on the notes is due July 15, with a 60 day grace period. The $12 million term loan currently being negotiated could be a source of liquidity, as proceeds would be partially applied against a payable for capital equipment, with the remainder available to the company. EBITDA could improve in the third quarter and forward, perhaps to a level approaching $3-6 million a quarter, a level which could enable the company to service debt but would continue to constrain the company operationally. Quarterly debt service on the company's other debt and capital leases (excluding the senior unsecured notes) approximates $3 million, while maintenance capital spending can be reduced to a minimal level over the next year. Longer term, the company will require higher levels of capital spending and sufficient capital to pursue investment in multi-client survey work, which is becoming a larger part of the work available and offers potential for higher margins than simple contract work. Eagle has retained CIBC to advise it in restructuring its balance sheet and is evaluating potential asset sales and financing alternatives. The ratings are supported by potential longer-term benefits of strong market niches, from the completion of a significant capital expansion/upgrading program that leaves the company with up-to-date assets, and from potential strengthening of the liquidity and capital structures after resolution of Eagle's assessment of additional long-term capital alternatives." If you believe that weak industry conditions will turn and that financing options are real then stock is a steal.