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

To: Gary Burton who wrote (33372)	12/22/1998 4:03:00 PM
From: Gary Burton	Respond to of 95453

Notes from DLJ report today on FLC--'the reasons for our positive stance on flc are--Mobil's motives could be varied, including getting out of a very high day rate contract--demand for deepwater drilling remains robust, partic for over 2500'--limited risk to other rig contracts as Jack Bates had the highest dayrate for any 4th generation semi. No other rig in FLC's fleet has as large a gap between current mkt and contract rate--number of newbuilds on track and on budget and only one conversion that is late (and that one is a below mkt rate one anyway so a cancellation could allow for higher recontracting-peregrine vii)--leverage concerns widespread but not justified.No principal payments till 2002 and we forecast 1999 ebitda of $493mm (with no newbuild/conversion rev) vs $155mm in interest plus maintenance---upside leverage tremendous