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

To: waverider who wrote (18729)	4/10/1998 10:23:00 PM
From: Shelia Jones	Read Replies (2) \| Respond to of 95453

Diamond and NucTrader:Its the strong demand part in correlation to the price decrease I'm having trouble with. With present utilization rates as they are is a 20% decrease in day rates appropriate? "Third, while day rates for the high-end jack-up rigs are softening, we believe that day rates for the shallow rigs will continue to increase slightly. This is a function of cost/value tradeoff. In the shallower waters of the GOM where rig demand remains strong, oil companies will be less willing to pay higher rates for relatively small incremental value of a high-end jack-up rig, especially on with a significant day rate differential. Obviously, day rate improvements for shallow jack-up rigs will be limited be the pricing set by the high-end jack-up rigs. However, we do not expect high-end jack-up rates top fall far enough to depress shallow water rig rates...."" Diamond -The reason I went EE was because I couldn't take the ambiguity of the English language. ggg