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

To: John Carpenter who wrote (11179)	2/9/1998 10:44:00 PM
From: Czechsinthemail	Read Replies (2) \| Respond to of 95453

John, Thanks for the recap on the conference call. RIG's strength in ultradeep drilling is a big deal. While 70% of their fleet is capable of 3000' drilling, I think it accounts for about 90% of their revenues. Their expertise has made RIG the preferred driller for these ultradeep projects. Also, the company is a leader in drilling design and improvements such as their simultaneous activity drilling processes that are said to shorten overall drilling time. RIG is a high quality player so benefits from the first-to-call and the last-to-leave advantages its reputation bestows. I'm sure it also helps their negotiations for new rig construction since the recent contracts provide for full payout on their rigs in under 5 years. The multi-year focus of the company's business is refreshing while watching the turbulence the stock price can go through around ups and downs of crude oil prices. I particularly like the predictability of its business, which makes it a good choice for buy and hold types. I'm curious if they mentioned the turnkey operations. My thought would be that they would generally prefer dayrates plus cost escalation contracts. Lastly, I was impressed by the company's ability to improve margins. They pulled off a major increase in EPS (from .18 to .46) on a 19% increase in revenues. As I've mentioned before, the long term nature of RIG's contracts means a longer ramp-up of dayrates, but also a steadier and more sustained impact from those high rates. Baird >>RIG stressed its competitive advantage is deepwater expertise. RIG has drilled 95% of all 5,000ft and up drilling projects. 70% of RIG's fleet 3,000ft or more-highest proportion in the world.>>