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

To: Big Dog who wrote (17815)	4/3/1998 2:09:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 95453

Big Dog, from a strictly financial perspective, a company invests its cash in the investment with the highest present value. So what has a higher present value: buying additions to the fleet, or buying back your own stock? According to the last numbers I saw, ESV had around $262MM. That would allow them to buy around 9MM shares which represented about 6.4% of the shares outstanding. In other words the share buyback program would have a very small direct effect on the price of the stock (of course it might have a great psychological effect). Now, assume by comparison that that same cash could buy 75% of a rig that generates $160,000 in free cash flow per day, or $120,000. Over the course of a year that's a 16.7% per annum cash on cash return. No contest! Regards, Paul

To: Big Dog who wrote (17815)	4/3/1998 10:03:00 AM
From: jbe	Read Replies (1) \| Respond to of 95453

To all you folks in the business: Several questions about the Caspian (see below). Any of your drillers involved/interested in getting involved -- and if so, how would they get rigs across land? And in view of the "oil glut," who needs/wants Caspian oil anyway? ADC PROMISES NEW DRILLING RIGS FOR CASPIAN PRODUCERS: Interfax reported recently that Valekh Aleskerov, head of the foreign investment department of the State Oil Company of Azerbaijan (SOCAR), attended a ceremony marking Advanced Drilling Co's entry into the Caspian Sea basin. Aleskerov said he was sure that ADC would help accelerate the pace of offshore development projects in the region by making new drilling rigs available. Some of the nine consortiums working in Azerbaijan have been forced to delay offshore work due to the difficulty of obtaining access to drilling rigs. At present, only one modern deep-water platform, the Dede Gorgud, is available and several of the consortiums have set up a Rig Club in order to facilitate use of the facility. SOCAR has promised to modernize several Shelf-type rigs and has begun the overhaul of the Shelf-5 but it will be some time before it can make any more rig capacity available. ADC, however, says it has begun to reconstruct and modernize two drilling platforms: the Marawah jack-up rig and a Shelf-type rig. The company says that Marawah will eventually be able to sink wells to a depth of 5,000 meters in waters up to 500 meters deep. Reconstruction work is being carried out at the Krasnaya Barrikada plant in Astrakhan by Aker Maritime, which is expected to finish the US$30 million job by August 31. Marawah was built in Japan in 1983 and bought by the Russian oil giant LUKoil in 1997. LUKoil wants to use the rig to sink wells in the Russian sector of the Caspian Sea. Less detail was available on the Shelf-type rig to be overhauled by ADC. Interfax noted that the platform is owned by NIKoil, the investment company that owns a substantial chunk of LUKoil. The rig is being rebuilt and modernized at the Astrakhan shipyard at a cost of US$180 million and will be used to drill wells throughout the Caspian. Interfax said that ADC managers planned to meet representatives of all the consortiums in order to discuss flexible scheduling for use of the rigs on exploratory work programs. (With information from Interfax Oil Gas & Coal Report, Mar 20-26 '98.)