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

To: Big Dog who wrote (88305)	3/2/2001 1:06:54 PM
From: Big Dog	Respond to of 95453

From Dain: GLM:B-Avg;GLOBAL MARINE CONTINUES TO EXPERIENCE IMPROVING RATES After completing a major upgrade on the 375-foot jackup Glomar Baltic I, Global Marine is bidding the rig at approximately $100,000, beginning after its job in Trinidad. Demand for long-legged jackups in West Africa is picking up substantially as was confirmed by another driller. Other markets requiring comparable equipment are also strong. In the GOM, 350-foot jackups are now bidding in the mid-$60,000s. Global Marine's last renewal was in the $60,000 range. Dayrates for 250-foot IC jackups are also improving, with a fixture for one of the company's 250-foot IC jackups at $50,000. Global Marine's other 250-foot jackups in the GOM should reach these rates as their contracts rollover. Global Marine has seen a major increase in bid activity for floaters in West Africa, including numerous multi-well or multi-year programs. Although we expect the 2,750-foot semisubmersible Glomar Robert F. Bauer to work at approximately $85,000 in the near term, the density of bids in the rig's water depth capabilities suggest that it could potentially be more than $100,000 later this year. The 1,500-foot semisubmersible Glomar Grand Banks appears likely to be headed for the North Sea upon completing its job with Exxon offshore Canada. The 5,700-foot semisubmersible Glomar Celtic Sea completed its contract with Elf and will be down approximately 13 days during 1Q01. The unit will then start a series of jobs in the North Sea at dayrates ranging from $93,000 to $130,000, depending on the well and the water depth. The start for the 1,800-foot semisubmersible Glomar Arctic IV program has slipped to early March from early February. Stock Opinion Our analysis of trading multiples in previous up-cycles shows that offshore drillers peak at approximately 7.5x replacement cycle EBITDA. Using that valuation on our estimated $1 billion replacement cycle EBITDA on Global Marine implies a stock price potential of approximately $40 per share.