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

To: Jamey who wrote (31536)	11/5/1998 11:25:00 PM
From: articwarrior	Respond to of 95453

Look what they done to my rig! Petroleos Mexicanos, or Pemex, the Mexican state-owned oil company, cancelled a long-term drilling contract with Noble Drilling (NE:NYSE). The John Sandifer, a jackup rig capable of drilling in 300 feet of water, has been let loose from its $65,000-per-day contract, originally scheduled to run through April 2000. The $65,000 day rate was the highest day rate of four rigs Noble has contracted to Pemex. Noble slipped 3/4 to 17 5/16. Pemex has shelved a development project in the Bay of Campeche, according to a Noble spokesman, and has elected to effect its contractual right to cancel its drilling contract with Noble with 20 days notice. "We feel that the other three rigs likely won't be terminated," says Steve Manz, Noble's director of investor relations. So far, the 20-analyst consensus estimates for this quarter and next year have not changed from 29 cents a share and $1.46, respectively, according to First Call. Lost revenue stemming from this contract cancellation may be offset by the Paul Romano, a newly converted semisubmersible rig expected next week to begin a five year contract for Shell (RD:NYSE) in the Gulf of Mexico at a day rate of $115,000. Steve Manz, Noble director of investor relations, says the exact termination date is unclear, but expects the rig to return to the Gulf of Mexico later this quarter. A possible option for Noble may entail swapping the Sandifer with another rig, and returning that rig, Manz says. He added that he is confident the Sandifer or the swapped rig will find work, "but it will be at a significantly lower dayrate" if it stays in the gulf. (The bulk of Noble's jackup fleet is dispersed internationally.) The low end dayrate for this type of rig in the Gulf is about $17,000 per day, but Manz says Noble does have a similar rigs working at $23,000.