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

To: Aggie who wrote (43083)	4/23/1999 9:05:00 AM
From: Big Dog	Respond to of 95453

The daily cash direct operating costs RIG refered to does not include cost of capital. If he was inlcuding that, it would be unusual. And you are right, there are no six figure daily operating expense rigs. I don't know exactly what he said though, and he may have been including costs of capital in the price at which they will not bid under -- but that would be VERY unusual. Drillers are like Kamakaze pilots...they just keep coming with low, suicidal day rates as long as they have rigs left to send out...and as long as someone will give them moeny to keep operating. loosbrock.com

To: Aggie who wrote (43083)	4/23/1999 11:29:00 AM
From: iandiareii	Respond to of 95453

Marc and Aggie Good morning. Thanks, Aggie, for the good points, since I posted about as many misses as hits. If a little knowledge is a dangerous thing, my last post was a virtual hell-cat. Here's some information that may fill some of the more lethal gaps. Rig currently has two jackups stacked, and recently released the drillship Discoverer 511 to its owner. I do not know the status of these rigs' crews. On the Terra Nova prospect RIG bid two 4th gen. semis, the Rather and the Leader, so I assume the job is in deep water, as both are rated to 4500 ft. I also got the impression that the job carried a long-term contract. So while you're right, Aggie, that Transocean's operating costs currently run ~50K/day on these floaters, they refuse to commit these units to years of service at rates only slightly profitable today. RIG will let you have either one for close to their costs, but you have to give it back in six months. With the Leader in the North Sea and the Rather in the GOM, the Canada project cannot proceed under those terms. Which reminds me, who's picking up the mob / demob tabs these days? I think RIG knows it has to keep its personnel together -- they'd better -- but won't address short-term difficulties by knuckling under to unreasonable long-term demands. Talbert said that Statoil would like to keep the Leader working after the current contract ends in August, so Terra Nova isn't the only option here. On the Rather, contracted into July, Talbert indicated that they'll risk finding catch-as-catch-can Gulf jobs, or stack, until something longer term can be worked out. We'll hear next month which co. is headed to Canada. On the good news front, Marc, RIG's new drillship the Discoverer Enterprise looks set to set to sail out of the Ingalls yard in May (and I hope RIG never again contracts with that co.'s current mgmt.) It then needs sea-trial certification from the D.O.T., and Varco will have to field-test and fine-tune the the installed equipment and software, but Talbert seemed confident (as one can be about these things) that it should be working by the end of June at the latest. Dayrate on this beauty? 198K, on op. costs of 55K, signed through May 2004. That's up from the 180K original set because Amoco wanted some add-ons. I tell you, it's all I can do to keep from clipping the picture out of RIG's annual and carrying it around in my wallet. Keep your fingers crossed. This thread is mighty, in the good times and in the not-so-good. Please let me know if I've missed anything here, and thanks to all. I'll be looking to add today, and on future dips. ian EDIT: Oppenheimer downgrades RIG to Buy from Strong Buy biz.yahoo.com Also, short interest info just released. Anybody want those figures?