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

To: Ditchdigger who wrote (37426)	2/12/1999 7:58:00 AM
From: Howard Frederick	Read Replies (1) \| Respond to of 95453

Re: FLC stock price ****************************************************** The debt is a big nut to carry,with low petroleum prices,IMO(I always relate this to building a spec house,-if you build the house and then can't sell it right away,your profit goes to the bank to pay the interest on the construction loan,granted this is simplistic,but the principles still apply,IMO)Some of their constuction projects do not have a locked in contract on completion....DD ****************************************************** IMO, your above comment is very astute and really hits the crux of why FLC's stock price is where it is. Even though FLC may have signed contracts, those contracts could turn into contested pieces of paper if industry conditions get bad enough and stay that way. If FLC gets into a protracted legal contest, they could be using funds for legal fees as well as paying interest on the debt. Things could get ugly pretty fast if other companies start cancelling/contesting the contracts. Having said that, you could still make multiples on your investment at these prices if conditions recover (as many people on this thread have pointed out). I can understand many investors bypassing FLC. They would invest in another driller with a more conservative balance sheet. By doing so they would be willing to sacrifice on the upside, while not incurring some risk on the downside. I don't own stock in FLC. For those that do, good luck, you could make a lot of money.