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Gold/Mining/Energy : NE, Noble Drilling -- Ignore unavailable to you. Want to Upgrade?

To: Fredman who wrote (294)	3/11/1999 7:08:00 PM
From: Michael Burry	Read Replies (2) \| Respond to of 301

Why NE is safe Skeptics have been pointing to the uncertainty of the length of the downturn in oil , and the questionable ability of many oil-related firms to survive this trough. Many have repeatedly pointed to the mass bankruptcies in the sector at various points in the past decades. But these generalizations do not hold true for some stocks. For instance, Tidewater has no debt despite being the largest player in its field. Hard to go bankrupt that way. Others, like DO, RIG, NE do have debt. But is this serviceable? NE is paying off 9 1/4% notes with 6.95-7.5% notes. And NE, an oil driller, just borrowed $400 million at A- rates. There is an incongruency here between what the market thinks of its shares and what the market thinks of its debt. Yes, first dibs etc. But to me the shares are still way , way undervalued. We have already seen that the slightest bump in oil sends the shares northward. And if theb equity markets were rational enough to realize who is capable of surviving this downturn, many of the shares of cos like NE would never be at these levels. Mike