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

To: Razorbak who wrote (40523)	3/21/1999 5:00:00 PM
From: Ditchdigger	Read Replies (1) \| Respond to of 95453

Thanks Sam, greatly appreciated. Will be interesting to watch for sure.I did purchase a few longterm tickets to the show last week and added Friday...DD PS: am I correct in thinking, due to Fridays debt placement,cash flow from the Frontier and RBS8M should now come into the company without attachments on these two? "The Company is currently evaluating two project financings to meet a portion of its additional capital requirements. The first is an approximately $270.0 million financing in the form of a synthetic lease that would be collateralized by the drillship Deepwater Frontier and drilling contract revenues from such drillship. Proceeds of such financing, if obtained, would be used in part to repay an interim financing facility, under which $135.0 million is currently outstanding. The foregoing interim loan has been made to a limited liability company which will operate the Deepwater Frontier and which is owned 60% by the Company and 40% by Conoco. The Company has guaranteed repayment of 60% of this interim loan. The second financing being contemplated is an approximately $250.0 million project financing that would be collateralized by the semisubmersible RBS8M (formerly the RBS6), as well as the drilling contract revenues from such rig. "

To: Razorbak who wrote (40523)	3/21/1999 8:55:00 PM
From: VLAD	Read Replies (2) \| Respond to of 95453

Razor, This Altman analysis is only a model. It totally ignores the fact that in the drilling sector the price of oil is the biggest force effecting a company that is highly leveraged as is FLC. I don't see a lot of middle of the road here. Either FLC goes bankrupt(I don't see that happening now that the price of oil has moved up and appears to be going higher) or the brains behind FLC have probably managed the most creative leveraged financing in the history of the drilling industry. I'm losing money on this one (need about 13.5 to break even) but I am confident that I not only will not lose a penny but also will see a nice profit in due time. FLC will shine in 99 so long as the OPEC players don't have a short memory and don't start cheating once oil starts hitting the $18.00 level. Hell we went from $10 to $15 oil in a very short time span. $18 is just around the corner. I think these countries realize the importance now not to cheat as the price of oil rises. I also think the bigger lesson is that they budget their economies on a pessimistic oil price so that they are not forced to sell cheap oil just to make ends meet.