What Saudi Arabia Has Bought For $50 Billion In Its Oil War
The oil kingdom has put its money where its mouth is in an effort to protect market share and get both OPEC and non-OPEC members to limit oil production. So what has Saudi Arabia’s $50 billion bought? Saudi Arabia’s policy together with a flood of oil supply and slow global economic growth drove down the price of Brent crude oil from $115 a barrel in June 2014 to as low as about $45 a barrel in January. But the price of oil came roaring back in April, staging its biggest monthly gain in six years, and is now trading above $66 a barrel.
Still, so far there have been only three shale oil bankruptcies, with Quicksilver Resources being the only notable company to file for bankruptcy-court protection. Two other independent oil producers, Samson Resources and Sabine Oil & Gas, which just missed an interest payment on its debt, could potentially be next. There is a huge wall of money coming from the likes of hedge funds and private equity funds that continues to keep many of these businesses going.
What you miss short term is OPEC is pumping nonstop and crushing small to medium domestic producers an drillers like this one. Every month the supply exceeds the demand means more bad to this company. BK? Possible, not probable. No way any of these like companies making any money.
Once the bulls in Hero hit what they think it's worth they'll move on. VTG has two big problems. They need 95% uptime in order to get a decent interest rate on their next bond issue in two years. Once they get a contract for the jackup in ready stack, you'll see the first pop. Second will be if they get a contract for the ship under construction; they either need a contract in 2 months (by July), sell their build contract to someone else, or walk away from the next milestone payment.
Oil has been stabilizing, Ensco just reported a good quarter, HERO has been on a nice run, but VTG hasn't moved much. It would seem to me that VTG is set for a big run. Maybe earnings next week will be the catalyst. What am I missing? A company like HERO, that is losing money, has been running up, yet VTG, whom makes money, has been rather quiet. Can anyone shed light on why there hasn't been more movement in VTG? It seems like a diamond in the rough to me.
Sentiment: Strong Buy
We don't appreciate your garbage on this post. You are a distraction with your nuisance Postings. Get a real job and stop pestering serious investors.
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We have already seen the cancellation and delays of many newbuild jackups. This will likely continue as companies who order these rigs need to put off large milestone CapEx payments given limited contracting opportunities. This in turn would put more pressure on shipyards that will have to assess continued investment in the construction of partially completed rigs.
Turning now to scrapping and cold stacking of floaters and jackups, it's reasonable to assume that offshore drillers will continue to rationalize their fleets to reduce expenses and preserve capital during the downturn by scrapping older rigs with limited contracting opportunities that require CapEx to keep them certified to work, and cold stacking other rigs that do not have re-contracting opportunities
Since September, offshore drillers have announced they will scrap 33 floaters; over the same time period an additional 20 floaters have been cold-stacked. We believe that the majority of these will also be scrapped. In total, these 53 rigs represent approximately 17% of competitive global supply.
Additionally, more than 40 floaters with similar age and technical characteristics to the 33 scrapped rigs I just mentioned are currently idle or will see their contracts expire in 2015. All will be likely candidates for scrapping and/or cold stacking and, as a group, they are double the approximately 20 floaters currently scheduled to enter the market by year-end. We anticipate the scrapping and stacking trend will continue, which will help to improve the supply and demand balance
Similarly, on the jackup side we expect stacking to accelerates. Here is the picture for competitive jackups, defined as independent-leg cantilever rigs. 46 are stacked and older than 30 years of age; another 66 working rigs that are 30 years of age or older have contracts expiring in 2015. Major regulatory surveys to recertify these older rigs, which must take place every five years, can be very expensive.
Ensco reported a good quarter which is probably why drillers are up big today. Both revenue and earnings up from same qtr last year. Here's what they had to say about the market.
As a result, approximately 20 new rigs are now scheduled for delivery by the end of 2015. More than half are contracted. Ensco's next drillship delivery, ENSCO DS-8, is among these contracted rigs and we expect the rig to commence its initial contract in the fourth quarter of this year. It remains to be seen if the other uncontracted deliveries will be delayed in anticipation of a better contracting environment in the future.
Recently, there have been many news stories regarding the Build in Brazil program. In total, this program was initially expected to add 29 floaters to the global supply by 2020, with all but one of these rigs working for Petrobras on their Pre-Salt development. Recent reports suggest more than half of these rigs may not be delivered and the remaining rigs are likely to be delayed.
Two of the newbuild floaters currently scheduled for delivery in 2015 are Build in Brazil rigs. An additional eight are scheduled for delivery in 2016, but may be delayed due to financial, shipyard, and other issues. If these units were to be delayed or canceled, this could result in demand for rigs from the international market as Petrobras looks to meet production targets.
Moving to the order book for competitive jackups, there are approximately 50 newbuilds with expected deliveries by year-end 2015, all of which are uncontracted. More than 60% of these uncontracted deliveries are with companies that do not currently operate a rig, so it remains to be seen whether these 30-plus units will be able to compete effectively.
why should anyone take your word? All you do is just write Sell with no facts why not either give a valid reason technically or just go away.
Depends on if Bragg can get contracts. Also, interested to see if we settled with SU or how arbitration is going?
Bragg needs to somehow get contracts for those jackups and the Plat! We need some luck to survive.
HOUSTON, TX--(Marketwired - Apr 29, 2015) - Vantage Drilling Company ("Vantage") (NYSE MKT: VTG) today announced that it will conduct a call at 11:00 AM Eastern Time on May 7, 2015 to discuss operating results for the first quarter 2015 and recent developments. Vantage will release earnings before the market opens on May 7, 2015. To access the conference call, U.S. callers may dial toll free 888-715-1394 and international callers may dial 913-312-1496. The pass code will be 1891552. Please call ten minutes ahead of time to ensure proper connection. A replay of the conference call will be available for two weeks following the call and can be accessed by dialing 888-203-1112 for U.S. callers and 719-457-0820 for international callers. The access code for the replay is 1891552.
SO TRUE.I was shaken off 8000 shares of CSIQ at $3.25 after buying at $5. well, $44x8000-$3.25x8000 WAS My ULTIMATE LOSS
Bragg can't buy back 100m shares as long as Nobu Su owns 1/3 of the stock outstanding. Get
Su out of the picture and the stock buy back is a no brainer.
Stock is undervalued by at least 400% if the company doesn't go bankrupt, while debt is only selling at face value to 10-15% discount (when buying up 10's of millions, you don't get the massive discount).
I think it would be a better long term play to do a stock buyback. $75 million of debt @8% interest = $6 million in interest every year. Or $75 million stock buy back should get you 100 million shares @ average .75 cents.
The bottom line is what would look better in 2018 when they have to issue new bonds to cover current bond maturity of 2 billion? A company with a larger earnings per share (300 million O/S versus 200 million O/S), or a company with 24 million less debt interest payments?