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

To: oilbabe who wrote (47956)	7/14/1999 12:49:00 PM
From: double-plus-good	Read Replies (1) \| Respond to of 95453

i've been looking at IO and OLOG. both look reasonably good on the chart. any thoughts on these two? dpg

To: oilbabe who wrote (47956)	7/15/1999 9:51:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

Houston Chronicle, Thursday: Exxon says it will not accept rig. Marine Drilling contends unit ready By MICHAEL DAVIS Exxon Corp. is refusing to accept a new $285 million rig from Marine Drilling Cos., saying the unit is not ready to be put into service by today's deadline, the companies said Wednesday. Marine Drilling maintains that the unit underwent adequate testing and inspection while it was being built and is ready for service. Analysts say the dispute is more likely a way for Exxon to secure a lower day rate on the rig at a time when a glut of rigs is depressing that market. Sugar Land-based Marine Drilling was facing a July 15 deadline to deliver the new Marine 700 semisubmersible offshore drilling rig to Exxon's Esso Exploration unit. The rig was to drill on Exxon's Diana project in the Gulf of Mexico. Exxon declined to accept the rig because it believed the unit wasn't ready, Marine Drilling said in a written statement. The two companies are in discussions to try to reach a settlement on the matter. Exxon warned Marine Drilling in early June that it might cancel its five-year contract for the rig, valued at $302 million, if the unit were not delivered on time. Since the rig was delivered on time, Exxon does not have the option of canceling the contract, said Matthew Conlan, oil field services analyst with Prudential Securities in Houston. Analysts believe Exxon is balking at paying the $165,410 day rate the contract requires. Despite recent increases in oil prices, day rates are still "heading south," Conlan said. He thinks the new rig -- either working for Exxon or some other company -- will likely end up commanding about $100,000 a day. The news of Exxon's refusal to accept the rig sent Marine Drilling's stock down 1 to 13 7/8 on the New York Stock Exchange. The dispute between Exxon and Marine Drilling is the latest among drilling contractors and oil companies. Earlier this year, Petroleo Brasileiro, or Petrobras, Brazil's national oil company, canceled a $126.5 million contract with R&B Falcon Corp. because the Houston driller could not complete an upgrade of its Falcon 100 rig on time. R&B Falcon said at the time that it planned to enforce the lease and that Petrobras had no right to cancel. R&B Falcon also is in a dispute with Mobil Corp. over cancellation of a rig contract for the North Sea. In a letter to Marine Drilling, Exxon said it did not believe Marine Drilling had the time to inspect and test the unit, a procedure known in the business as commissioning, and still make the deadline. Scott O'Keefe, Marine Drilling spokesman, said the rig was designed to be constructed and commissioned simultaneously. He declined to specify why Exxon did not find the rig acceptable; nor would Exxon. Ed Burwell, Exxon spokesman in Irving, would confirm only that Esso had refused to accept the Marine 700 and was in discussions with Marine Drilling. How quickly another client could be found for the Marine 700 if a deal is not struck with Exxon is unclear, Okeefe said. "We haven't tested the marketplace," he said.