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

To: james paterson who wrote (2677)	11/2/1997 5:08:00 PM
From: JGreg	Read Replies (1) \| Respond to of 95453

I just asked about this company a couple of days ago. Does the IR think their earnings will sigfnificantly overcompensate for the debt load they have? From their 10K: >>The financings related to the Mallard and Quail Acquisitions in November 1996, combined with the Company's issuance of the Convertible Notes in July 1997, have substantially increased the Company's debt levels. At August 31, 1997, the Company had $567.1 million in total indebtedness, compared to $3.4 million of total indebtedness at August 31, 1996. The substantial levels of debt will result in a higher level of interest expense and an increased percentage of the Company's cash flows being used for debt service and may limit the Company's ability to obtain additional financing for future acquisitions and capital expenditures. See "Liquidity and Capital Resources." For the foregoing reasons, the acquisitions of Mallard, Quail and the pending Hercules Acquisition will affect the comparability of the Company's historical results of operations. << I like the price, but their own projections, plus diluting the float with a new issue of 10M shares to help pay off this debt has to be the reason their P/E has lagged. If someone can show me a good reason to buy PKD I'll probably pull the trigger, but it seems like this will really cut into earnings. Of course, the general momentum of buying the drillers could carry them right along, too, in which case their new issue is absorbed into the market, their debt reduced, and they're as credible as the next company. I'm open to opinions. I'm always willing to learn since most on this thread know more than me.