An excellent presentation that confirmed anticipated strong earnings and cash flow, sizable backlog, higher day rates, longer contracts , likely dividend increase and positive aspects of the upcoming spinoff. My one concern is that debt/cap will remain at high end of range through 2014. Your thoughts would be appreciated.
What is the concern for 2014. Download the Presentation and look at the debt schedule repayments. Not much NE is going to do about cash needs, ship/JU on order still need to be paid for. Cash flow (not free) is 2.5B -3.0B starting Q3 of 2014 well above the needs of debt repayment. If they need to generate long debt to pay off the revolvers, they will do it. NE has never been known to screw up the balance sheet with risk. Why to you think they always point to the backlog which more than required to pay off debt. The backlog is not a projection of revenue, but contracts to perform for the operators. The operators are locked in or they will pay x3 for breaking the contract.