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

To: marc chatman who wrote (16538)	3/25/1998 7:21:00 PM
From: 007	Respond to of 95453

I agree that deepwater debt is not nearly as significant as debt elsewhere. For example, RIG is building those drillships with debt, but the cost of payout on that debt is covered by long-term contracts with majors. Banks will get in line to finance that kind of deal as it's about as certain as you can get. This type of debt is a good thing and shareholders should hope that more financed deals like this are announced. This is really an exceptional situation though, and it doesn't apply to other subsectors. Other types of companies don't have that type of guaranteed cashflow to service and expire the debt. Any downturns will hurt the leveraged company more, and even in a healthy environment, debt generally reduces management's growth options. 007 PS Still lamenting over selling Rig, but holding NSS, TCMS and UTI.