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

To: 007 who wrote (22302)	5/18/1998 7:33:00 PM
From: Elmer	Respond to of 95453

007, thanks for clarifying MDCO's SE Asia rig status. I agree 100% with your feeling that it is a good time to add to MDCO or to start a new position in the stock. I listened to MDCO's conference call at the end of the first quarter and strongly feel the sequentially flat EPS last quarter was a one time event. The Company had 30 days of downtime for special surveys on the Marine 300, 301, and 303 which hurt revenues as well as increased costs. The Company's biggest revenue generator, the Marine 500, was also out of service for about a week with a BOP repair. Also, the Company paid some significant executive search fees and signing bonuses to attract some additional deepwater expertise. The only thing that surprises me is why didn't MDCO provide some of the usual "street guidance" during the quarter? Lastly, MDCO said they will be incurring some debt over the next year to convert/upgrade some of the rigs they have purchased. However, even after this, their B/S should be solid and capable of more rig purchases or newbuilds for the deepwater. Disclaimer: I am long MDCO. OO7, thanks again for the info., Elmer

To: 007 who wrote (22302)	5/18/1998 8:53:00 PM
From: Czechsinthemail	Respond to of 95453

007, My apologies for any mistakes on MDCO's fleet and Indonesia. I had run across that reference somewhere in a discussion of MDCO. Perhaps it is off base. The estimates I was looking at were $1.68 for this year with quarterly comparisons of $0.36E vs. $0.25A for this quarter and $0.41E vs. $0.31A for next quarter. That's 44% growth this quarter and 32% next quarter. Coming on the heels of a the weak quarter, these don't seem as strong to me as some of the other drillers. ESV, for example, trades with a lower PE yet is estimated to earn $0.60E vs. $0.37A this quarter [+62%] and $0.63E vs. $0.48 next quarter [+31%]. Eventually, when their semi comes on line, they will presumably pick up their growth rate, but I'm assuming a strengthening of oil prices by then that will show better growth for jackup rigs. What I like best about MDCO is their balance sheet and the emerging position in deep drilling at a relatively low PE, and I'm considering buying more on that basis. good luck, Baird