By Mavis Scanlon
                   Staff Reporter
                   6/10/98 6:23 PM ET

                   This time it wasn't one of the usual suspects. 

                   In a surprise announcement, Stolt Comex Seaway
                   (SCSWF:Nasdaq) said it signed a letter of intent to acquire
                   Ceanic Corporation (DIVE:Nasdaq) for $222 million in cash, or
                   $20 per share. 

                   The $20 per share price reflects a premium of 29% over Ceanic's
                   closing price from June 8. Ceanic jumped 3 1/16, or 19.9%, to 18
                   1/2 on the news by midday Wednesday. Stolt's stock traded at 29
                   1/2, down 3/8, or 1.3%. 

                   Unlike other recent deals in the sector, however, the proposed
                   acquisition of small-cap Ceanic, which in February changed its
                   name from American Oilfield Divers, has failed to spark buying
                   in the depressed oil service sector -- in fact, the Oil Service Index
                   is bleeding, down 3.24 to 94.52 near the close, a level last seen in
                   late January. Not even the usual takeover or merger candidates
                   could muster much action in the wake of the merger news. Camco
                   (CAM:NYSE) fell 3/4 to 62, and Smith International (SII:NYSE)
                   dropped 1 1/2, or 3.5%, to 42. 

                   To be sure, the combination, which will give Stolt, based in
                   Mareseille, France, a market capitalization of about $1.8 billion, is
                   on a much smaller scale -- and in more of a niche segment of the
                   oilfield service industry -- than any one of the recent marriage
                   announcements in the sector. The Baker Hughes (BHI:NYSE)
                   and Western Atlas (WAI:NYSE) deal, announced in early May,
                   will create a $6.5 billion technologically advanced oil service
                   company. EVI Weatherford (EVI:NYSE), is now the fourth-largest
                   oilfield service company; the merger was completed in late May.
                   And the megadeal that jumpstarted 1998 merger mania in the
                   patch, Halliburton's (HAL:NYSE) purchase of Dresser
                   Industries (DI:NYSE), is on schedule for completion in the fourth
                   quarter. 

                   But the woes of the crude oil market, which have rippled out to oil
                   company spending and oil rig rental company dayrates, are the
                   main reason investors are staying away from the oil patch these
                   days, even as consolidation continues apace. 

                   On Tuesday, crude oil prices fell below $14 per barrel for the first
                   time since May 19 on a rash of bearish news reports: Both the
                   International Energy Agency and the U.S. Department of Energy
                   lowered their predictions for demand growth in the second half of
                   this year; OPEC's May production figures reflected a change in
                   the wrong direction -- they increased rather than decreased,
                   according to a Dow Jones Newswires survey; and inventories for
                   gasoline grew, showing less demand as the crucial driving season
                   sets in. At 3:06 p.m. EDT Wednesday, crude futures for July
                   delivery were down 30 cents to $13.55 per barrel. 

                   Traders say with the $14 floor of support for crude gone, the
                   market may be on its way to test the low of $12.80 per barrel we
                   saw before OPEC's March Riyadh Pact to cut production. 

                   "The way the commodity price is right now, everyone is just
                   scared to touch these stocks," says Robert Muse, an analyst at
                   Simmons & Co. who follows Stolt Comex. (Simmons, a Houston
                   investment bank which does not rate stocks, has performed
                   underwriting for Stolt Comex.) 

                   The drop in oil prices and the stocks which track the commodity
                   underscores the dichotomy enveloping the oil service industry
                   and its investors, says Jim Wicklund, who follows follows Ceanic
                   at Dain Rauscher Wessels in Dallas and rates it a strong buy.
                   (Dain Rauscher has performed underwriting for Ceanic.) 

                   Oil service companies have years of strong business opportunity
                   ahead of them, especially in deepwater development, says
                   Wicklund. But right now, investors are paying attention only to
                   the commodity price, he says, keeping share prices and
                   valuations low. The low valuations benefit companies in an
                   acquisition mode, he says. 

                   Stolt and Ceanic fit together strategically, says Muse at Simmons,
                   and since Stolt had been signaling its intention to solidify its
                   presence in the Gulf of Mexico, the offer was not so much of a
                   surprise to him. 

                   What surprised Wicklund at Dain Rauscher was that the offer
                   was in cash rather than stock, and that it came so soon after
                   Ceanic named a new CEO. Kevin Peterson, who came to Ceanic a
                   year ago as COO from competitor Coflexip Stena Offshore, was
                   named CEO and president in early May. 

                   Some thought the price was a little low, Wicklund added. Ceanic
                   is among the companies whose earnings estimates have not come
                   down over the last six months of low commodity prices, Wicklund
                   says. Its business -- mainly underwater construction of oil
                   industry infrastructure and diving services -- has remained
                   strong. First Call consensus estimates for Ceanic, which stood at
                   $1.03 in January, dipped a few cents in March but now stand at
                   $1.02 for the year. 

                   In addition to subsea construction services, the company, which
                   recently sold off its headquarters in Lafeyette, La., and moved to
                   Houston, provides maintenance, installation, repair and support
                   services for drilling operations. Customers include not only oil
                   and gas companies, but other offshore construction and
                   engineering companies. 

                   Ceanic says it is the largest provider of diving services in the Gulf
                   of Mexico, with about 550 divers and 21 diving support vessels.
                   (Sixteen of its diving vessels operate in the Gulf.) It has also
                   expanded its fleet of "remotely operated vehicles," or ROVs,
                   which service the deepwater market, and expects to have 12 of the
                   vehicles in use by the end of 1998. 

                   In a show of confidence in Ceanic's deepwater technological
                   prowess, Shell awarded it a contract in February to design, build,
                   test and operate a deepwater pipeline system.