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Gold/Mining/Energy : Global Santa Fe (GSF) (formerly Global Marine) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Grenier who wrote (731)	5/5/1998 11:54:00 PM
From: Anthony Wong	Respond to of 2282

Global Marine Chairman Says Company's Not in Any Takeover Talks Bloomberg News May 5, 1998, 11:35 a.m. PT Global Marine Chairman Says Company's Not in Any Takeover Talks Houston, May 5 (Bloomberg) -- Global Marine Inc. Chairman C. Russell Luigs said the company hasn't had any discussions with other companies about being acquired. The provider of drilling rigs and services to oil producers is more likely to be an acquirer, and not of a whole company, Luigs said. Global Marine last week was the subject of takeover speculation in a report in Business Week magazine. Expansion is coming through purchases of individual drilling rigs, because whole drilling companies have become too expensive, he said. That keeps Global focused on its best business, while buying an entire company might give it other less-appealing assets, Luigs said. ''You wind up thinking, 'Gee, I'm going to have to say to the shareholders that we ended up investing $2 billion, $3 billion, $4 billion'' to buy an entire drilling company and show that it won't hurt earnings, Luigs said. ''You would hope you could find something better to do with that magnitude of investment.'' Luigs, 65, discussed the company's strategy in an interview at the Offshore Technology Conference in Houston. Today, Global Marine said he would retire as chief executive and remain as chairman. Robert Rose was named chief executive and president, replacing John Ryan, who resigned as president and chief operating officer to continue cancer treatment. Global Marine shares rose 5/16 to 25 5/16 in early afternoon trading. The shares rose 5.6 percent on Friday after the Business Week report said Global could be acquired by Sante Fe International Corp. Luigs said he's optimistic the decline in oil prices will have only a minimal effect on deep-water drilling -- depths of 1,000 feet or greater. Deep-water drilling contracts are longer term and less vulnerable to immediate capital-spending cuts from companies hurt by lower oil prices, Luigs said. Rising demand for oil and the slowing production of older existing wells will require oil companies to continue drilling new wells, he said. ''There undoubtedly are some projects which will fly at $17 a barrel and some projects that wouldn't fly if you really believed that oil was going to stay at $15 a barrel indefinitely,'' Luigs said. '' I don't know anybody who thinks that.'' Crude oil prices on the New York Mercantile Exchange have dropped to the $15 a barrel range since the Organization of Petroleum Exporting Countries agreed in late November to boost supply quotas. The lower oil prices have prompted several major oil companies to announce cutbacks in their 1998 plans for spending on rigs and other capital equipment. --Maura Webber in Houston (713) 313-4000 ext. 1601, through the news.com