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Gold/Mining/Energy : Diamond Offshore DO -- Ignore unavailable to you. Want to Upgrade?

To: skibob who wrote (3)	8/16/1998 10:46:00 AM
From: Robert T. Quasius	Read Replies (2) \| Respond to of 101

Favorable comments from Merrill Lynch last week: "Notwithstanding the Shell move and the persistent low oil price level, we remain positive on the growth prospects for deepwater spending and on rates for deepwater rigs. We continue to expect demand for deepwater rigs to exceed supply through next year and into 2000 even if oil prices remain below $15 well into next year (versus our base case of $17+ WTI by year end 1998) Partly because of contract provisions, we expect little or no impact from this change on the 1999 earnings of RIG or DO. The shares of both RIG and DO have fallen sharply as growth investors have continued to bail out of the remaining oil service stocks in their portfolios. At current prices we consider both stocks to be strong value buys. We think both stocks could double during the next 18 months although there could be additional near term downside pressure until oil prices begin to firm."