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

To: waverider who wrote (23200)	6/1/1998 5:49:00 PM
From: marc chatman	Read Replies (1) \| Respond to of 95453

I couldn't agree more on NE. Ditto for MDCO, ESV, RDC, among others, which is why I sold these weeks ago. The stuff I bought last week is EVI, VRC, FGII, SII, and a small amount of RIG. I've gone over the 10k's again, and I really don't see the likelihood of a substantial impact on earnings. Nevertheless, I waited for the technicals. So, I used discipline, reason and all the tools at my disposal, and I still had my head handed to me today. In any event, nice move on shorting NE. It's good to see someone here making some money. You may have to finance the party by yourself, though. <g> I'm more jealous over the short than about my mis-timing going long, since I covered my shorts some time ago (techs and internet, not oil service).

To: waverider who wrote (23200)	6/1/1998 7:47:00 PM
From: NucTrader	Read Replies (1) \| Respond to of 95453

I sat watching quote.com a number of days last week, and I noted whenever our sector was going down, the volume rose; whenever prices were going up, volume fell. My last experiment with this sector was last Monday [6/25]. Bought CDG, FGII, and VRC and sold them within 24 hrs because the sector didn't go the way I was anticipating and I didn't feel comfortable being in longer term. The experiment cost me 0.6%, so I guess I should consider myself lucky....

To: waverider who wrote (23200)	6/1/1998 8:13:00 PM
From: Elmer	Read Replies (1) \| Respond to of 95453

Diamond, now that we have heard from a short on NE, let's here from a long. While NE is not a pure deepwater driller like RIG or DO, it is hard to argue that they are not going to be a significant player in this area going forward. In 1999, 30% of their cash flow will be derived from deepwater drilling. Also, NE would be less hurt by declining jackup rates than say an ESV or GLM, unless you feel dayrates are going to continue downward for more than a year. 80% of NE's 1998 jackup fleet time is already booked on term contracts at fixed rates. In 1999, this number still remains fairly high at 55%. Now that NE's EPS estimates have been trimmed by most analysts to reflect the 20% of 1998 jackup rig time that recently rolled over or will be in the near future, EPS estimates should be relatively safe. The earnings visibility of NE is very good relative to most of the other drillers with the exceptions of RIG and DO. NE also has two more submersibles that could be upgraded to their EVA semi design. It is estimated that these potential upgrades would add about $.25 each to EPS. NE can also expand its deepwater fleet with newbuilds given its very strong balance sheet and huge cash flow from the locked in dayrates on the majority of its rigs. NE is trading at under 10x next year's Paine Webber's EPS estimate. Since PW just initiated coverage of NE last week, and it is a known fact that these analyst's get the blessing from company management on their earnings models before they publish them, I would have a very difficult time shorting this stock. But, that's why I am long NE and that's why this game is so much fun - people can have differing opinions and put their money where there mouth is. Best of Luck (other than with your NE short), Elmer