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To: Susan Saline who wrote (16455)	9/23/1998 9:19:00 PM
From: pz	Respond to of 53068

Chat Oil Service Stocks exchange2000.com Here is the reason smart money is in the deep water drillers. It makes the leading deep water driller RIG look very good. Paul Wednesday September 23, 7:06 pm Eastern Time R&B Falcon sees deepwater offsetting shallow woes HOUSTON, Sept 23 (Reuters) - Offshore drilling contractor R&B Falcon Corp (NYSE:FLC - news) said on Wednesday secure contract revenues from deepwater work would cushion the impact on its earnings of a recent sharp slide in shallow water rig rates. R&B Falcon President Steve Webster said the company was already assured of $2.9 billion in revenues under long-term contracts for its deepwater fleet. ''Shallow markets have come down recently and pricing will continue to weaken,'' he told the Dain Rauscher Wessels energy conference. ''However, in our case we think that is more than balanced by what is happening in deepwater on committed contracts,'' he said. Webster said newly constructed vessels entering the company's fleet and the recontracting of existing deepwater vessels at higher prices could lift the company's earnings per share to over $4.00 in 2000. The First Call consensus of analysts estimates for R&B Falcon puts the company's earnings per share at $1.40 for 1998 and $1.85 for 1999. Webster said R&B Falcon believed oil and gas fundamentals were much better than commonly perceived. He said the global oil supply overhang could start to decline next year as non-OPEC production was likely to peak, adding that this would return pricing power back to OPEC's ''swing producers''. Futhermore, exploration and production companies would have to maintain a high level of drilling activity in the Gulf of Mexico to meet growing U.S. demand for the fuel, he added.