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

To: upanddown who wrote (11967)	2/18/1998 8:43:00 AM
From: RGinPG	Respond to of 95453

Take a glance at the fundamental analysis at the site rgdoczzz.home.texas.net You'll get a good feel as to how RIG compares to other deep water drillers.

To: upanddown who wrote (11967)	2/18/1998 12:22:00 PM
From: Czechsinthemail	Respond to of 95453

John, I think it is hard to make the call on "best" deep driller. I feel very positive about RIG, and it is my largest holding among the drillers. But how the drillers will do in the future is likely to depend on a number of factors including oil prices, overall demand for new drilling, the rate of new rig building, and contingencies like accidents and shipyard delays. As I've said elsewhere, if demand increases dramatically, other companies may be able to pass through higher dayrates faster than RIG because of their shorter contract terms. What I like about RIG is that it has the heaviest concentration in the deepest part of the drilling market, it has built-in revenue escalation from its long term contracts, it has recently done maintenance, inspections and upgrades on its fleet, and its new builds are under long-term contracts that will fully pay back the construction costs. Although RIG carries a higher trailing PE than almost all the other offshore drillers, the higher estimated growth rate means that they should have a close to equivalent trailing PE about one year out. Given the higher visibility of RIG's long-term growth, I think it will command a premium to other drillers at that time. Hence I'm betting on better relative performance. One other important consideration for me is that I think RIG is in a better position to do well in an environment with lower oil prices than any of the other drillers. Baird