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

To: Big Dog who wrote (40359)	3/18/1999 8:42:00 PM
From: JZGalt	Read Replies (1) \| Respond to of 95453

Sounds like "laddering" to decrease risk while maintaining reasonable return.

To: Big Dog who wrote (40359)	3/19/1999 12:15:00 AM
From: Lee Fredrickson	Read Replies (1) \| Respond to of 95453

Dog, Andrew's question and your response got me to thinking about a situation we've seen happening lately that both you and Razor have mentioned before, i.e., when the E & P companies have the upper hand (like now), they'll rake the drillers over the coals as hard as possible. This includes breaking contracts for small or non-existent reasons to be able to renegotiate deals at a lower rate. What I'm wondering is...when the shoe is cyclically on the other foot and the drillers are in the catbird seat, do they (drillers) ever use such tactics (or others) to get out of low day rate contracts? Seems to me that as outfits which are very dependent on one small group of customers, that 'getting even' by getting out of undesirable contracts would be difficult the drillers. ??? Lee

To: Big Dog who wrote (40359)	3/19/1999 10:02:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Big Dog; ie: Drillers Contract philosophies long/short term... You hit on a big, big (pun intended) subject. With all of these contracts rolling offline now, through year end; the savy of management and a degree of gambling comes into play. Do they lock in a longterm contract with low rates - but guaranteeing cash flow and a moderate degree of earnings/profitability in this present low/moderate dayrate enviroment ? Or, do they gamble - hold out for 30-90-120 days and re-negotiate from what ''could'' be a far more positive dayrate enviroment ? Obviously, some companies are in a better position to ''gamble''/wait than others... Any comments on what has been the past history of certain companies/management ? Who is in the drivers seat and who is not ? ie: RDC seems willing to wait/hold out for better rates and stack rigs while others - work at a loss - keeping cash flow running... RIG especially has been unjustly criticized and sold off of late imho - they may have an advantage that no one is counting one here...