Replies to post #16 on FPSO'S

[MikeDDKing]

Thanks for all your responses on SEVAN.ol.

I'm glad that my questions are helping you better understand your SEVAN investment thesis. SEVAN is up again today so you investment is making you money. Congrats!

I'm still scratching my head on SEVAN. Your earnings estimates seem quite optimistic. For 2008 analysts are estimating a loss of $0.28/share whereas you are estimating a profit of $0.70/share. In 2010 you are estimating earnings of $3.60/share. If we use the current share count which I think will be too low, that translates to earnings of $581M. That is pretty close to where I think revenue will be ignoring Kanfa in 2010. While I think your guess of additional drillers and FPSO's makes sense, I don't think those will be generating revenue by 2010 based upon past history.

Your statements about larger FPSOs and water desalination are perhaps the most salient points. Maybe I need to be looking out further than 2010 to really appreciate what Sevan's revenue and earnings will look like.

I still need to spend some time looking at Kanfa to understand that part of the operation and the corresponding revenue and earnings capability.

I do agree that the rates on the first two leases were low as they needed get someone to be the guinea pig.

I hope to come back later and dig further on Sevan but I'm still not seeing the obvious buy.

Mike