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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 (17809)	4/2/1998 11:16:00 PM
From: Big Dog	Read Replies (2) \| Respond to of 95453

I don't recall exactly, but it seems like when ESV bought Penrod that Penrod (which was owned by the brothers that liked to collect silver trinkets) was the one or two largest offshore drilling contractor in the world. ESV has Rainwater. He ain't 'fraid of spending money. It might make a little since for ESV to go after such a company as I know that they are very interested in getting in the floater business. They are currently bidding their own new design semi on a Petrobras term charter. Seems to me it would take a helluva premium to do such a deal. Of course if you look over the last couple of years and the rigs that have been sold, it seems that everytime one is sold it is at a price that is "too" high...yet looking back they look like steals. If you believe in the market staying strong you have to buy to grow and you have to pay top dollar at all points in the market cycle. You can't EVER really buy for "under market" even though some companies like to think they can. What I would like to see is a huge round of stock buybacks. That would solve the problem of "what will the drillers do with their cash", it would give a good boost to stock prices and its probably the best investment they could make. And if you don't add to the rig supply you insure higher day rates. (I will likely write an article for Oil & Gas Investor magazine shortly and this will be one of the things talked about.) In my opinion, we have not seen the boom yet for jackups. But it's coming.