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To: patron_anejo_por_favor who wrote (140754)	12/28/2001 12:05:04 PM
From: reaper	Read Replies (1) \| Respond to of 436258

but Patron, the rigs are worth what they're worth; we have an arms-length transaction that places the value of the rigs at $1.55mm each. yes, obviously Patterson is more than the sum of its rigs, but is it FOUR TIMES the sum of its rigs?? the group that sold Patterson the rigs (assuming they were not in some kind of financial distress) determined that they'd rather have $1.55mm (each) today than the cash flows that those rigs would generate over the next handful of years. so mutual fund managers buying Patterson today (its up again) would rather have the net present value of future cash flows to be delivered by Patterson's fleet, and are effectively saying (based on the valuation of the company) that each of those rigs will generate $6mm of NPV of cash flows over time. but a guy in the business just decided to sell rigs for $1.5mm rather than take the future cash flows. this frankly is a gigantic dis-connect to me. i'm long out of Patterson, btw. it was a nice trade, though. cheers