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

To: Evolution who wrote (47789)	7/12/1999 9:24:00 AM
From: John Carpenter	Respond to of 95453

The only thing RIG holders will "get" is the drilling assets of Sedco Forex. Sedco Forex's fleet is inferior to Transocean's fleet in capabilities and quality. However, RIG's management believes that future rig investment will be easier with the combination. Sedco Forex and Transocean have similar revenues and earnings(about 1.2B in rev's and 350M in earnings each). The transaction is expected to be mildly dilutive to RIG's 2000 E.P.S. and mildly accretive to 2001 E.P.S. Is bigger better? The integrated oil companies think so. Perhaps it's better to have a bigger driller negotiate with a bigger oil company. Large scale investments will be easier for the new RIG. Perhaps RIG is going to become the one stop shopping driller for the integrated oils. I believe the combined company would have had $2.3B in revenues and $700M in profit using 1998 numbers.