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

To: Big Dog who wrote (24083)	6/14/1998 4:45:00 PM
From: P.Prazeres	Read Replies (2) \| Respond to of 95453

Here's a reminder of how "good" things were just 12 months ago. It is an example of how "analysts" over do it on the up side...(so maybe there are over doing it on the downside now)... These are headlines for ESV last summer: 07/29/97 UP 3 7/8 to 62 7/8... Hanifen Imhoff reiterates buy... Co. unavailable... 07/29/97 3:05 pm... ENSCO INTL (ESV 62-5/8) UP 3-5/8, HANIFEN IMHOFF REITERATES BUY... Analyst Robert Trace says highly encouraged by recent improvements in Gulf of Mexico, North Sea dayrates as well as co.'s excellent visibility on continued increased dayrates... Raises $3.05 '97 EPS estimate to $3.25, $4.20 '98 to $4.50; $75 target to $100, 18.2x '98 EPS... Reflects sold-out world jackup markets driving up dayrates for co.'s jackup fleet ahead of previous schedule as well as co.'s ability to capitalize on this strength by keeping several of its rigs on contracts that are continuously reset to market rates... (continued)... 07/29/97 3:05 pm... ENSCO INTL (ESV 62-5/8) UP 3-5/8, HANIFEN IMHOFF REITERATES BUY, RAISES ESTIMATES, $75 TARGET TO $100.. (continued)... Analyst Robert Trace notes in North Sea, all 6 of co.'s jackups are currently on long-term contracts that are indexed monthly to current market rate... In Gulf of Mexico, strong demand continues to place upward pressure on dayrates... Thinks co. highly leveraged to improvement in world jackup markets through its fleet of 35 premium jackup rigs./S.Trombino 07/16/97 12:45 pm... UPDATE.. STILL BUY ENSCO INTERNATIONAL (ESV 65*****)... Beats Street consensus with Q2 EPS $0.74 vs. $0.34... Average dayrate for rig fleet rose 15% from Q1 levels.. Tells analysts sees no slowdown in pace of dayrate increases over next 18 months... Current spot dayrates well above rates on contracted rigs.. As with many of peers, ESV profits highly leveraged to dayrates, since most rig costs are fixed... Operating margins for drilling segment widened to 60.5% in Q2 from 56.0% in Q1... Marine transport segment dayrates up 8% from Q1 levels... Raising '97 estimate to $2.90 from $2.45, '98's to $3.90 from $3.40. /N.Rosenberg Maybe we will see this type of story again. Paulo

To: Big Dog who wrote (24083)	6/15/1998 12:05:00 AM
From: Douglas V. Fant	Read Replies (3) \| Respond to of 95453

Big Dog, You are on to something I believe. I'll really be shocked if there are no acquisitions in the oilfield service sector over the next six months. Long term energy demand forecasts are strong. Short-term the market is in the tank. Yet many of the service companies have improved their balance sheets significantly (e.g. RDC) over the last 6-12 months. So I agree with you. Lower debt levels, good cash flow, and low expectations in the market-time to go a prowlin'... (Indeed, on the energy production side, we have stepped up our efforts to find suitable acquisitions, looking particularly for companies in financial need and "willing to deal"... not the same sort of leverage in the service sector as you sometimes find in the energy sector, but generally stillthe same rationale...). Sincerely, Doug F.