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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 (14030)	3/6/1998 8:53:00 PM
From: Big Dog	Read Replies (4) \| Respond to of 95453

I don't have all the numbers in my head, but the facts are that companies make MORE money from jackups and "not-so-deep-water" floaters. This is basing the money you make on the cost of the asset you used to make the money. This is why I like DO. They have a very low cost (low basis in the rigs) rig fleet. Deepwater sounds sexy and the analysts love it, but there is really better money in the "smaller" rigs. While we already knew this, I learned today while visiting a senior executive of a major offshore driller that they know it too, and therefore aren't all that excited about building a Mercedes with a huge price tag when you can make a higher rate of return with a Chevrolet. There is some resistance in the day rates at this 200,000 to 215,000 area for these mega-rigs. I expect the rates will likely rest at these levels for a while till the (rig) market has a chance to take a breath. MDCO -- I started to say to Steve last night after I thought about those options that maybe it's best to sit still for a while and see if merger mania appears for this stock. If you will all recall, many months ago I named MDCO as a merger candidate, and still see it that way. Writing the covered calls in these days of mega point jumps on merger news may not be the best thing to do -- I will hold off a bit. The volume and price action on MDCO has been telegraphing us for a good many weeks. I don't use voodoo or T & A, but just watching the tape day after day has told me this. Thean -- Don't worry about over supply. It's not going to happen. Did you know the fleet actually shrank in 1997?