Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Bolder who wrote (26956)	8/3/1998 7:59:00 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

BDI's debt... I am speaking to BDI's debt position historically and during this selloff in relation to this timeframe. BDI ''was'' a low debt company DURING the sell off and now is very shrewdly choosing to buy at the bottom and grow via acquisition ! - what a concept ... if it ain't happening - then make it happen ! One has to be comfortable with a managment style of a company one invests in and BDI IS going to grow ! These guys will be standing when the smoke clears - and I, like DLJ concurrs - think BDI in 3-5 years will be near or at the top. They had virtually no debt prior to this well timed offering. It is old news and not the reason for today's selloff; both the deal, the price and the terms of the offering have been well known for some time. My point is that there are more than a few low debt, strong cash companies that are selling below book and at very inticing levels. We are going to see some consolidaton from here as well - and BDI is not done ! (interest due in 2005 shouldn't scare anyone!)... except a big fish looking at their cash, high quality Rig fleet and bargain basement valuation - get the point ? They were a sitting duck... This is good management. Watch these guys in 3-5 years - bank on it. What better time to buy BDI or for BDI to be buying - than at the bottom ? BDI had a strong cash position and evidently still has $25 Million left over from this offering after the Trans Texas Rig purchases to make more acquisitions. DLJ has had some very flattering things to say about these guys. Takes some guts, to be buying here during bad times, but they are in a strong financial position and I like the acquisitions while things are cheap - no one is accusing them of sitting on their hands or asses... GW's CEO just stated that they as well are in a strong financial position with more than adequate cash to see them through any forseable downturns... These guys aren't going broke - lots of natural Gas drilling going on & BDI additionally got a tie-in contract to do gas drilling for Trans Texas here. Some positive info that I've found in the E&P research I've been doing is that those firms with high quality fleets - SCR Diesel Electric Rigs with deep drilling capability and well respected crews are going to be very busy soon. There are a lot of E&P small & mid cap companies that have been putting off drilling due to low prices; but they now have to generate cash flow and they realize they are reasonably close to prices recovering (Winter weather...) etc. There are a lot of drilling projects about to come on line in the natural gas arena. PS... has anyone else asked why many of these companies are selling for 20-30% less than when we were at $11-$12 Oil and had no idea what OPEC was going to do - if anything at all ? No idea what earnings would be ? No idea if $11-12 Oil was going to stick or go to $8 etc. ? At the VERY LEAST - we know what isn't going to happen - what OPEC wants to do - factoring in 75% historic compliance... Does anyone here really think we are worse off than the Jan or March selloffs info or risk-wise ? (keeps getting closer to cold winter weather - as well...).