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Gold/Mining/Energy : Pride Petroleum Services (PDE) -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (453)	5/8/2008 5:54:18 PM
From: Dennis Roth	Respond to of 454

Pride International (PDE): Sale of platform rigs- another small step in the right direction; Buy - Goldman Sachs - May 7, 2008 United States News Last night Pride announced that the company has entered into a definitive agreement to sell its fleet of platform rigs to Blake International for $66 million. The fleet consists of 10 active and 2 retired platform rigs in the Gulf of Mexico. Analysis Our sum-of-the parts and replacement value analysis value the platform fleet at $52-$71 million, essentially in line with the $66 million sale price. Although a relatively small sale, we believe that divesting non-core assets, such as the platform fleet, makes Pride a more attractive consolidation candidate. Implications While this divestiture is relatively small, we view it as a step in the right direction towards Pride's stated goal of becoming a deepwater focused driller. We expect that Pride's next strategic move (whether or not it remains an independent entity) will be the separation of the Gulf of Mexico jackup fleet, which will highlight the current relative discount assigned to Pride's floater fleet. Our 12-month price target of $47 (unchanged) is based on the mid-point of our sum-of-the-parts analysis. Risks included capacity additions or a decline in commodity prices.