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

To: Ronald J. Clark who wrote (60816)	2/23/2000 9:31:00 PM
From: Harold S.	Read Replies (2) \| Respond to of 95453

FLC earnings Bomb...what next for FLC?

To: Ronald J. Clark who wrote (60816)	2/24/2000 2:00:00 PM
From: Umunhum	Respond to of 95453

I listened to the FLC CC this morning. They seemed positive as usual. If this quarter is not the bottom, next quarter will be for sure. Venezuela turn key business is slowing. Shallow water has picked up significantly and there is full utilization for all active rigs. Unfortunately, there are 22 rigs cold stacked (waiting for a contract of 6 months or more before they are activated). FLC owns 16 of these shallow water rigs. *INTERESTING NOTE* Paul Lloyd said the number to watch was the AGA numbers and if they were below 1 trillion in a month (the end of the heating season), the shallow water would reach full utilization within 3 months and rates would start rising. Hold on to your ESV, MRL, RDC and FLC. He also stated that FLC is still selling at about 35% of replacement value. Some of their counterparts are selling at 100% of replacement value. He believed Deep Water will pick up slower. The majors have been about 1 year behind the curve in the prior bust recoveries and so he is not surprised to see them lagging this recovery either. He expects some recovery later this year and by 2001 the recovery will be in full swing. Mentioned (as always) that 1 billion cash flow a year is a gimme and 2 billion is not out of the question if we see rates like 1997 again. Didn't talk about Oil or oil prices except to say that the majors budget's are based on $15 oil. One of the analyst asked about new builds, Paul stated that rates would have to raise significantly before they would consider anything. They would be more interested in retiring debt and buying back shares. IMHO, FLC continues to be the worst performing, highest risk vs. reward prospect in the drilling world. And it's soon going to be "reward time".