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

To: ron peterson who wrote (45737)	6/1/1999 8:59:00 PM
From: tdl4138	Respond to of 95453

<FLC>..<GLM> You guys are starting to argue semantics...too much debt is a "financial problem"...no matter how you look at it. Call it what you may, but FLC is carrying a lot of debt in a still very weak business environment. I agree they have a heck of a lot of potential, but only if rigs continue to be contracted and the expected increase in dayrates follows...quickly. But all the other drillers would benefit also. Perhaps the best combination would be a RIG>MRL marriage...MRL gets more deep water capability and RIG gains the jack-up market. A benefit for both. MRL is carrying manageable debt and has a new state of the art rig...if it gets out of the yard in time...with its long term contract intact. Its a combination that simply makes sense. I wouldn't be surprized to see a combination like ATW and MRL...2 smaller players joining forces to compete and gain leverage in the market. I fail to see where any other driller would take the chance on FLC and their additional debt burden. If the oil recovery were to stumble...or be delayed, is any other driller strong enough to carry the additional debt load? Would it really be worth the gamble? Are there not better possibilities to work with? Doesn't logic dictate that in this business climate, the cleaner the balance sheet, the more appealing any combination becomes? I'm not down on FLC...no position long or short. I just think there are better drillers to invest in. And I bet the other drillers see FLC the same way. Just my thoughts Dave