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

To: diana g who wrote (17874)	4/3/1998 10:07:00 PM
From: Big Dog	Respond to of 95453

Yes, I was using 6 months as an example. The reality is that it very well could take that long or longer -- depending on what they need. You don't go to WalMart and get this stuff off the shelf. FLC hasn't reported what down time will be involved. I haven't seen any coons on the new spread, but saw some deer today. I have a nice story prepared for any coons that might come callin. While exploring today I found an excellent opoortunity to create The Gulf of Canine.

To: diana g who wrote (17874)	4/4/1998 11:07:00 AM
From: Teddy	Read Replies (1) \| Respond to of 95453

FLC article, i don't get the first part, but the rest sounds good. (how come it took me two days to post this?) Dow Jones Newswires -- April 2, 1998 R&B Falcon Seeks Equity Swap For Oil, Gas Unit By Loren Fox NEW ORLEANS (Dow Jones)--Offshore driller R&B Falcon Corp. (FLC) is hoping to sell its oil and natural-gas production unit, possibly in two pieces, in exchange for equity stakes in the acquiring companies. That would allow R&B to participate in any upside move, President and Chief Executive Steven Webster told Dow Jones. The unit, Reading & Bates Development Co., was owned by Reading & Bates when it merged at the end of 1997 with Falcon Drilling to form R&B Falcon. Reading had taken stakes in some fields as an adjunct to its contract drilling business. The strategy didn't turn out well, and R&B said in March it would divest itself of the unit. The unit's lack of success in the past year made a spinoff or initial public offering unlikely, Webster said, so R&B wants to sell. Some analysts have valued Reading & Bates Development at $300 million to $400 million. R&B has a market capitalization of roughly $5.2 billion. Webster, in New Orleans to attend the Howard Weil Energy Conference, said the unit really consists of two pieces. The gem is a 20% interest in 3 million acres of Gabon, which is near deepwater regions where large discoveries have been made. Webster said this holding is "very valuable" and R&B would like to retain some some equity interest in it. The other piece consists of the unit's interests in two projects in the deepwater Gulf of Mexico. Webster said these properties are probably worth roughly $75 million. He would also like to swap these for equity in the acquirer, but he'd consider a sale for cash at the right price. R&B's goal is to divest itself of the properties so that it doesn't have to invest any capital in the fields, but could still provide rigs for them. In the meantime, R&B is focusing on its core business of offshore drilling. The company has the world's largest offshore drilling fleet - 115 vessels, including 12 semisubmersible rigs and 11 drillships for deepwater, 26 jackup rigs for shallower waters, and 60 barges for the swampy coastlines known in the industry as "the transition zone." Webster said analyst estimates for 1998 earnings of $2 to $2.10 a share seem reasonable. Oil prices, which have been unusually low for several months, have not translated into lower rates for R&B Falcon's rigs. Instead, dayrates continue to rise; one of the company's second-generation semisubmersibles is contracted for $145,000 a day for two years starting this quarter. R&B's domestic offshore and barge drilling fleets are already 80% committed for 1998, Chief Executive Webster said. He noted the company's fleet is largely tied to natural-gas drilling. The slide in oil prices caused some momentary softness in the market for its few oil-oriented workover barges, but that has passed. Oil companies are still trying to build up a substantial deepwater fleet of rigs, Webster said, and so drillers are still bidding to build new deepwater rigs. Between now and early 2000, R&B plans to add another two semisubmersibles and seven drillships, through either new construction or upgrades. R&B would consider building additional rigs, he said, but only if they had pre-arranged contracts that guaranteed revenue equal to at least 75% of their cost. R&B would like to form a long-term alliance with a major oil company in which it would be the producer's primary deepwater rig provider, Webster said, noting that strategy has worked for other contract drillers. The company still has 13 barge rigs essentially in storage. It plans to gradually roll them out over the next few years, with the first two scheduled to return to service in May or June. Webster said the company is also trying to capture more of what he calls "wellsite revenue." An example is the company's marine support unit, which provides tugboats and other support vessels for inland drilling barges. The unit should generate $100 million of revenue this year, he said. -By Loren Fox; 201-938-5267; loren.fox@cor.dowjones.com