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

To: SJS who wrote (23805)	6/11/1998 9:54:00 AM
From: SliderOnTheBlack	Respond to of 95453

Bear Stearns energy conference (from tues & wed) notes ...(FGII & VRC) some strength in the patch! ...from ''Wills daily commentary'' link @ labpuppy.com .. not a bad little site...good commentary and discussion, news bits etc. on the oil sector. RE: FGII ''At the Bear Stearns conference, Friede Goldman (FGII) stated that they are pleased with second quarter results so far into the quarter. In addition, they have not seen any reduction in the demand for deepwater projects. Moreover, they seemed to imply that they might be awarded some new contracts in the near future (but no time frame was given). However, they did state that the devaluation of Asian currencies has wiped out FGII's price advantage (due to transportation costs, etc.) over Asian shipyards competing for work in the Gulf of Mexico. '' RE: VRC Varco (VRC) stated at the conference that it has not seen any reduction in demand. It is still comfortable with street EPS estimates for 1998 (although it did not talk about 1999 numbers). The company stated that their problem is not a decline in demand for their products (as its backlog keeps rising) but rather they must successfully implement their capacity expansion program. The company's rising backlog is due almost entirely to new deepwater rig construction (very little is coming from retrofits to older rigs). ÿ This did not stop VRC's stock price from falling over 5% today Long FGII and just established a new position in VRC, as these prices were too good to pass up for this company, in this niche, with that backlog ! - the only ''bet'' I see with VRC, is how well will they execute on their capacity expansion - I think this is a great ''problem'' to have vs. falling day rates for drillers... - thanks to Big Dog and others on the point to VRC.