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

To: SargeK who wrote (66641)	5/19/2000 2:24:00 PM
From: BigBull	Read Replies (2) \| Respond to of 95453

OT any Copper fans out there? If so pm me. I'm really starting to take a shine to metals more and more. Not from the "defensive" angle but from the "offensive" angle. Any FCX fans out there?

To: SargeK who wrote (66641)	6/2/2000 9:59:00 AM
From: SargeK	Respond to of 95453

FGH - Posted on Yahoo "Response to fundtechie: by: SargeK 6/2/00 9:29 am Msg: 7928 of 7929 I believe your statement: "From a financial perspective though, sale provides $80M in working capital now." may be in error. Here's why (from the 10-k): In connection with the merger with HMG, on November 3, 1999, the Company entered into a new secured bank revolving and letter of credit facility ("the New Credit Facility") that replaced the Credit Facility. Under the terms of the New Credit Facility, the Company may borrow up to $120 million under a senior secured revolving credit facility. In addition, the New Credit Facility provides a $44.2 million senior secured letter of credit facility. The New Credit Facility has a three-year term and is secured by substantially all of the Company's otherwise unencumbered assets, all of the Company's domestic subsidiaries and 67% of the stock of its foreign subsidiaries. The interest rate ranges from 1.375% to 2.75% over the London Inter Bank Offered Rate ("LIBOR"), or the base rate (as defined), at the Company's choice. Under the New Credit Facility, the Company is obligated to pay certain fees, including an annual commitment fee in an amount of .50% of the unused portion of the commitment. Amounts outstanding under the New Credit Facility may not exceed an amount based on specified percentages of the Company's accounts receivable, inventory and net contract related investments. At December 31, 1999, the Company had $106.7 million in cash advances under the credit agreement with $4.2 million available under the New Credit Facility. Average usage since inception of the New Credit Facility has been $96.4 million, resulting in an average availability of $13.9 million over the same period. "The New Credit Facility requires the Company to comply with certain financial covenants, including limitations on additional borrowings and capital expenditures, certain debt coverage ratios, minimum net worth and other customary requirements. At December 31, 1999, the Company was not in compliance with the leverage ratio, the minimum fixed charge coverage ratio and the minimum net worth requirement. On March 28, 2000, the Company obtained a waiver of noncompliance with these requirements and an amendment to the New Credit Facility that among other things, amends the leverage ratio, the fixed charge coverage ratio, and minimum net worth requirement, and requires the commitment amount under the New Credit Facility to be reduced by 75% of the net proceeds of asset sales. The amendment changes the interest rate to the lender's base rate plus 2.00% per annum until the Company completes certain of its contracts. It is not anticipated that the Company will complete these contracts until the fourth quarter of 2001. In connection with the amendment, the Company is obligated to pay certain fees, including an annual commitment fee in an amount of 1.00% of the unused portion of the commitment." biz.yahoo.com Comment: Since the amended credit facility "requires the commitment amount under the New Credit Facility to be reduced by 75% of the net proceeds of asset sales.", it appears (to me) that $60.M will go toward reduction of debt AND reduction of the lender's commitment and $20.0M may be used for Working Capital. The same amendment would also apply to the recent sale of the yacht division. Good Luck SargeK messages.yahoo.com AND: Petro-Drill by: SargeK 6/2/00 9:38 am Msg: 7929 of 7929 If I understand the Petro-dril settlement correctly, I find it disappointing. Here's why: (From the 10-K): "Based upon current estimates, the Company believes that it will incur approximately $60.0 million in costs in excess of the contract prices, as adjusted for change orders, to complete these contracts." And "The funding of these excess costs could have a significant impact on the Company's liquidity. See "Liquidity and Capital Resources." biz.yahoo.com (From the news release): Under the agreements, new delivery dates for the Amethyst 4 and Amethyst 5 are September 15, 2001 and December 15, 2001, respectively. Both parties have agreed to increase the float-out milestone payment by $3 million per rig and to a final $6.4 million payment per rig at delivery, resulting in a new contract value of $186.8 million based upon the new delivery schedules. The parties have also agreed to increased late delivery penalties; however, the company believes that during the past four months it has completed necessary engineering to allow for a smooth completion of the construction plan. In addition, both parties have agreed to terminate all pending litigation related to the project. biz.yahoo.com Comment: I had expected a much more favorable outcome from the Petrodrill dispute (much like that of Ocean Rig). My read on the settlement is FGH may be recovering only $18.8M of the projected $60.0M cost over-run. P.S. Yesterday I sold 1k of the 2k I picked up last week @ 7 1/8. The remaining 1k is my only holding in FGH at the moment, which I MAY sell today into strength. FWIW Good luck all SargeK post.messages.yahoo.com