Wednesday, December 06, 2006

Calls of Note Part 7

- RBC Capital is positive on Zoltek (NASDAQ:ZOLT) after Norway-based oil-services company yesterday entered into a tentative $610M 3-year contract for its semi-submersible H-6e, the world's largest, most advanced drilling unit, to start operation in Nov. 2008 on the Norwegian shelf.

The H-6E is specifically designed for ultra-deep water operations. It will likely require advanced tech umbilical tethering cables to secure the rig to the sea floor. Offshore wells drilling in 2,000m or deeper are prime candidates for the carbon-fiber cables.

Aker Kaverner has been working with Zoltek to develop a new cable product that uses carbon fiber rods instead of steel (less weight and stronger for longer-length cables). Yesterday's large $610M oil-services rig contract increases likelihood of large demand for Zoltek's carbon fiber from a new end market.

Maintains Outperform on ZOLT.

Notablecalls: I would not be surprised to see some buy interest in ZOLT.

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