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

To: IndioBlues who wrote (51421)	9/19/1999 7:04:00 PM
From: Think4Yourself	Respond to of 95453

Sodomy says US to blame for low oil prices. Very humorous article. They should make a comedy show about him. 216.33.103.184@2@6@3@26&path=News/Category.NRdb@2@7 "This is injustice," he declared. Consumer countries, in the forefront the United States, are the main culprits, he added.

To: IndioBlues who wrote (51421)	9/19/1999 7:34:00 PM
From: Aggie	Respond to of 95453

Good Evening Indio, Now for my two cents. 1. Old iron is old iron. We have already seen about 80% of the upgrade work possible with old rig designs, this was done during the last boom, mostly to accommodate the shifting drilling technology. Such things as the addition of top drives, extra mud pumps, sponsons, etc. were integrated into these older rigs without much fuss. You cannot squeeze blood from a stone, guys, and old iron cannot be made to work in deep water. Deep water is the future of big budget exploration programs, like it or not. Older semis and drillships do not have the displacement to handle high variable deck loads necessary for deep water mooring and long drilling risers. Older semis and drillships do not have the generating capacity to convert to dynamic positioning, nor do they have the room to add it. Older semis and drillships are not easily converted to high pressure - high temperature rigs. This is why we have had an enormous surge in new build activity. Land rigs, on the other hand, are only hampered by derrick load capacity and design depth rating. A 20,000' rig can drill a 20,000' well, whether it's in 1950 or 1999. And a land rig can easily accommodate extra mud pumps, additional power generation, etc. 2. There has been a robust interest in deepwater blocks worldwide, though not at the frenetic pace of 1996-97. It is not advisable to use a boom year as a yardstick to measure profitable activity. The last licensing round in Brazil, for example, for deepwater blocks attracted widespread industry attention and competitive bidding. Same for Nigeria. The Falkland islands will be busy again, and soon, make no mistake. The soft-pedalling of the discoveries last year was purely strategic. The presence of hydrocarbons in any amount is hugely significant for such rank wildcats. 3. FGI will almost certainly have a slow year with respect to new build orders, but just as certainly, will be busy with work on recommissioning supply vessels, shallow and medium depth-rated jackups and floaters, and barge rigs. The commodity prices dictate profitability in mature petroleum provinces, and there are hundreds of shallow-medium water prospects in the GOM which are being freshly reviewed. I myself do not have a position in FGI at this point, short or otherwise. All of this whining about people expressing their opinions...let's give it a rest, eh? In the final analysis, if you think they're shorting, adjust your perspective and strategy accordingly and take your losses and gains like an adult. 'Nuff said. Last week I had the pleasure of touring the Stena Tay, a completely new concept in Semisubmersible drilling. Very interesting rig conversion (used to be a "flotel"), the power package generates 45 MW (WOW! Small city consumption)and burns about 65 tons of diesel daily to do it. The rig is a HydraLift ram rig, the derrick is not load bearing - only a stiffened structure. The hookload is handled by vertical hydraulic rams. Drilling assemblies and casing strings are made up to the side and out of critical path. Well...Shell has taken a huge gamble with this rig (5 year contract), I wish them luck with all the kinks. Regards to all, Aggie

To: IndioBlues who wrote (51421)	9/19/1999 8:15:00 PM
From: SliderOnTheBlack	Respond to of 95453

Want to see the numbers supporting the case for $5 FGI ? - yes 5 bucks... Compare to MDR - and tell me; why you would own one single share of FGI - C'Mon, tell me with a straight face ! - anyone !!!! On a valuation basis of book value, price to sales, cash & backlog multiples - FGI very, very easilly could go to $5 - if it is valued the same as its peers. In my opinion; based on the math; FGI is allready getting a substantial valuation premium to its peers... UFAB - a fab co. trading at 1.25 x book value & .59 x sales. biz.yahoo.com MDR sells for 1.16 x book and .45 x sales biz.yahoo.com HLX - trading at .99 of book value - with a much, much bigger backlog than FGI and a lower multiple of price to sales .17 x sales. biz.yahoo.com FGI - trading at 2.41 x book value - .52 x sales; is 3 times the price to sales multiple of HLX, 15% higher than MDR; double the book value multiple of UFAB and MDR and nearly 2 1/2 x HLX's price to book multiple..... and you guys think sub $10 FGI is impossible ?!?!?! The way I see it; FGI is one bad news event away from $5. On a book value multiple, or a price to sales multiple; - FGI could drop 50%, or more from here.The numbers support it. If they lose a cancellation from their backlog here etc.... you tell me; how they then compare valuewise to their peers. FGI currently will work off its backlog in 7.73 months - totally !! - ie: $343.9 M backlog at a rate of $44.5 M in revenue per month << ... During the three months ended June 30,1999, the Company generated revenue of $133.5 million,.... The Company's backlog is approximately $343.9 million as of June 30, 1999. Substantially all of this backlog consists of projects related to deep water drilling rigs. Some of these contracts are subject to cancellation by the customers; however, the Company has had no indication that any of its contracts will be cancelled. The backlog amount includes a $143.5 million contract for the new construction of a Friede & Goldman, Ltd. designed Millennium S.A., semisubmersible offshore drilling rig that is subject to the owner's securing rig financing. Such financing is expected to be secured in the third quarter of 1999. >> And you "DOUBT" we're going to see $9ish ? from the April 1998 FGI 10 Q: ad.doubleclick.net ance;ord=937784174 <<Due to increased demand for its services, the Company's backlog has increased from $66.9 million at March 31, 1997 to $407.0 million at April 5,1998>> Many people see FGI as a $100- $200M maximum backlog company from here on out - given the blip on the chart nature of the Offshore Rig Boom of 1997. If they are right - applying the very same multiple valuations that they are putting on HLX, MDR or UFAB right now - FGI is a $5 stock today.... with using $300 M + backlog... And you guys still wonder why the insiders are sellers; and the short interest is nearly 20% of the float ? I think FGI is far, far from the best buy in the Fab sector. PS - MDR now has more cash per share; yes actual CASH in the BANK; than FGI's shareprice !!! - bigger backlog as well...by nearly 9 times ! MDR sells for 1.16 x book and .45 x sales; their backlog is nearly 9 x FGI's and they have more CASH in the Bank than FGI's backlog ! MDR"s backlog is $2.7 BILLION ! Backlog - 6/30/99 3/31/99 ------- ------- (Unaudited) (In thousands) Marine Construction Services $ 702,015 $ 407,223 Power Generation Systems 972,902 905,042 Government Operations 742,177 860,981 Industrial Operations 352,615 400,649 Adjustments and Other Eliminations 1,145 (799) ------------------------------------------------------------------- TOTAL BACKLOG $ 2,770,854 $ 2,573,096 =================================================================== Slider say; at the very least; own MDR here - and make FGI show you the money ! Talk about a valuation anomaly; comparing MDR to FGI... FGI's day in the sun may come one day again; but folks - the cold hard numbers of reality - say this baby is far, far from cheap. I do not think this is particulary cheap here at $10 people...those holding at $18, $15, $12 - and we all know very, very few of you "non-traders" have a cost basis at $10; considering the short periods FGI was there; and since most of you are NOT traders; let's be honest about those cost basis positions. My question - given the bounces from $18 - and the fall here; how far do you hold ? How much pain does one take; refusing to believe the numbers ? Let's hope they hit all the good news on the arbitration, the HLX merger, the Millenium financing...etc - they need a hat trick to support $5 imho - comparing them to their peers ! I stay short untill this hits bottom - and I say HLX doesn't take the deal - my "prediction" is no merger. HLX stands alone.

To: IndioBlues who wrote (51421)	9/19/1999 9:01:00 PM
From: Bernie Diamond	Respond to of 95453

FGI margins as per 10Q "During the quarter ended July 5, 1998, approximately 45.8% of the Company's revenues were attributable to retrofit and conversion of existing offshore drilling rigs. Gross margins on retrofit and conversion projects typically are higher than margins earned on new build projects because a higher percentage of the costs incurred is labor related and a smaller percentage of the total project is performed on a fixed price basis. Gross margins on repair and retrofit projects also vary based on, among other things, the size of the project undertaken. Management expects that gross margins, as a percentage of revenues, would trend slightly lower as a more significant portion of the Company's total revenues is derived from the new construction of offshore drilling rigs. Of the Company's $343.9 million backlog at June 30, 1999, approximately $252.3 million is attributable to fixed price contracts for completion or construction of new rigs." biz.yahoo.com We'll just have to wait and see...won't we. :-) Bernie Long FGI Long HLX and looking to get longer at rock bottom prices.