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Gold/Mining/Energy : FLC Falcon Drilling -- Ignore unavailable to you. Want to Upgrade?

To: Czechsinthemail who wrote (74)	4/13/1998 9:09:00 PM
From: diana g	Read Replies (1) \| Respond to of 461

Re: More on Barge-Rigs Hi Baird + Thread, My thinking on the barge-rigs is that ESV must see the Type of Drilling for which Barge-Rigs are most suitable as A Viable Long-Term Market Segment, or they would not devote resources to constructing new rigs of this type. I notice this also in the ESV annual report, which I think can also be reasonably inferred to support the strength of the market for Barge-Rigs: "...The Company's ten barge rigs in Venezuela operate under long-term contracts for Petroleos de Venezuela, S.A.("PDVSA"), Venezuela's national oil company, that expire in 1998 and 1999. The contracts on the barge rigs afford PDVSA the option to buy each of the rigs during or at the end of the contracts. The Company is currently in discussions with PDVSA to extend the four contracts expiring in 1998. The Company currently believes that it will be able to secure new contracts with PDVSA or another operator in Venezuela at rates similar to those currently being received...." Of course, if the rates "currently being received" are not all that great, then this is not so positive a statement. But if that were the case, would ESV be building new Barge-Rigs? I think not. Maybe it's just me, but I've had a vague discomfort for some time about FLC's large Barge-Rig fleet, suspecting that it might be a segment of the company that could be less marketable in the future. (Not really based on anything solid; More as part of the 'Deeper is Better' zeit-geist that's current.) This new-building of Barge-Rigs seems to me a very positive statement about this market segment. I claim no expertise. I'm just a simple grrl trying to figure this out as I go along. I welcome correction and instruction. best regards, diana