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

To: SargeK who wrote (57189)	12/20/1999 8:17:00 PM
From: Ken Ludwig	Respond to of 95453

Just a little weather note. It's 17 degrees F here in Ann Arbor, I'm freezing my heini off and my O&G portfolio looks like a battlefield running with red blood. Now Fant says he's lookin for bigger bargains! Some guys got no respect. I must say the large, for me, holdings I own in this sector take the edge off the cold. Boom 2000!

To: SargeK who wrote (57189)	12/21/1999 12:53:00 PM
From: SargeK	Read Replies (2) \| Respond to of 95453

Things are really heating up on Yahoo FGH message board since I posted the FGH/IR Q & A "Some solid info for FGH Value Investors. SargeK I sent an E-Mail to Mr. John Hastings FGH/IR this morning with a few questions. In the E-Mail I provided my phone# and requested if & when he had some spare time he might call me. Shortly after posting the E-Mail, I received a call from Mr. Hastings. Since I wasn't expecting such an immediate response, I was NOT well prepared for the Q & A. I made copious notes and the following is a gist of the major points of a half hour conversation. I purposely waited until after the Market closed, lest I again be accused of spamming and cheer-leading. Q Has business started to turn around yet, to the point where you are adding to backlog instead of working off backlog? Or is that question premature? A We haven?t gotten to that point yet, we have some business (final contract negotiating stages) that are very close to finalizing very soon, probably within the next 30 days, of total contract value in the neighborhood of $100m to $200m . He added that another factor which affected backlog was changed orders and that as much as $10m in changes may occur within a single quarter and may not show up in an announcement. He also, mentioned that although the company is usually identified on the message boards as an Oil Field Service Company at least two of the contracts expected very soon were in the non-energy related sector. Some of this business has been referenced in the trade press so it should not be considered inside information; but, technically the projects have not reached the stage where they may be included in the backlog. Q Since the Company is working off approximately $40m to $50 million per month it would appear that with the new business you may be reaching a point of a business turn around. Is that an accurate statement? A. It may be a bit early to take those contracts and use them as an example of a shift in the market place. Every contract starts out as an inquiry, somebody calls up and says ?we want to talk about this project?. The level of inquiries we are experiencing now both on the off-shore energy side as well as commercial maritime is as high as it has been in years. We are getting a lot of inquiries. Many of them are not related to the price of a barrel of crude. Q What is the status of the Ocean Rig dispute arbitration? A We have submitted all the requested information to the Arbitration Panel (3 member arbitration panel with expertise in Maritime Construction contracts) and some resolution may occur during the first half of the first quarter; but, it could occur later. Q Is the Company planning anything to support the stock price (i.e. stock buy-back, press releases, etc.) and why is the Company remaining so quiet during this time? A. We have no plans for a share buy-back since our liquidity is being used for working capital purposes. As for as press releases when we have new contracts or other news worthy events, we will certainly release this to the financial and investment communities. Right now, what ever there is to say isn?t for us to say, it is our customers. The people who need to be out there giving press releases and interviews are Diamond, Noble. Ensco, and the major drilling companies. We can?t drive the market. We can only respond to it. The turn around, or when the market picks up is not dependent on the shipyards. We do not sit on the news. We are required to release it whether it is good or bad. Q (re: 3Q/99, -$0.36, loss) What kind of accounting procedure requires you to take a loss for an unresolved claim; but, disallows potential off setting or mitigating gains such as the $75m included in your counter-suit? A. We were not taking a loss; but, an accounting charge. What we were doing is reversing out profits (because of the litigation) that were previously recognized. He then started to detail in accounting terms how the procedure works with regard to Cost Accounting compared to Pool Accounting. I stopped him, (indicating I would talk to my youngest son when he comes home for XMAS since he has an accounting degree from the Univ of Texas and I would have him take a look at the proxy and the 10-Q for 3Q/99) and have him explain it to me in terms a retired, uneducated MSgt might understand >g<. Q Consensus estimates indicate FGH earnings @ $0.86 for FY/00. Merrill Lynch in its initiation of coverage for the company estimates $0.50. Which number are you comfortable with? A I think the consensus $0.86 are old, pre-merger estimates. The only published estimate I have seen is Merrill Lynchs and I am comfortable with it. He pointed out that Net Interest Expense (on page F4 of the proxy) resulting from the merger were much higher and that would account for (my words) some of the disparity between estimates in addition to the increased number of shares. Q Will you explain the Conversion feature of the 4 « % Subordinated Convertibles? And, do you have a current quote on the Bonds? A Each Bond (face value of $1000. ) may be converted to 18.095 shares of FGH common stock with a conversion value of $55.26 per share as outlined in the prospectus. The bonds are currently quoted @ 60 (%) (representing $600. Outlay for each Bond). Note: To determine if the bond is "in the money", calculate as follows: $1000 * 60% = $600. $600./18.095 = $33.16 There was additional chit chat; but, the foregoing generally covers the more important issues. I found Mr. Hastings genial, informative and direct. If any of this is unclear or abbreviated, I'll take the blame, the IR answered the questions put to him in a forthright manner. SargeK? TWO PEAS IN A POD! (Posted today) messages.yahoo.com Artic7: "Sub $5 marginability is coming - I'd bet anything." messages.yahoo.com Slider: "Going down... watch for that quick one handed grab at $4 7/8ths ! It will be mine...." messages.yahoo.com Artic7 & Slider continue to DENY they are one and the same. If they are NOT the same, they are most certainly two peas in the same pod (or BOILER ROOM) and sing from the same hymnal. >g< Slider: "I've got a 5 day cruise - talk to you after XMAS.... Sarge" messages.yahoo.com O/T Slider, How is that job working out in the Cruise Ship?s galley? Not the most pleasant way to enjoy a cruise, is it? I spent 16 days on the General USS Callan back in the summer of '55 heading from Camp Kilmer N.J. to Tripoli, Libya via ports of call @ Laverno (saw the leaning tower of Pisa) and @ Naples (also toured the ruins of Pompei) and Casablanca (what a hell hole). Have a good voyage little buddy and tell that fat ass cook to get off your butt! I bet your thinking: Life was better in the ghetto! >LOL< Tic tic tic Sarge