Oh my god! This company is in serious trouble. Why the HELL are they sending a rig from Gabon to Bahrain for "warm" stacking? That's like taking my car from Oklahoma to New York to park it in a garage for storage? WTF! That costs MILLIONS of dollars!
And if they expect a contract in Bahrain then why don't they say so?
Look at Rig 185, it once had a day rate of $150k and it now has a contract working for $60k which is less than HALF of the old day rate!
Why is the rig in India undergoing underwater inspections for 7 days? Is that rig in need of maintenance? More millions of dollars! WTF!
Look at the fleet report carefully, EVERY international contract is finished in 2011, it's going to get ugly here really fast... day rates are being slashed in HALF for 2011 as evidenced by Rig 185, rig values have gone to the dogs based on recent selling prices of SEAHAWK rigs.
Tell me again how this company miraculously kept their leverage ratio below 8:1 with no contracts in sight and very bad business in Q3?
Slashed day rates, junk rigs, poor natural gas prices, clueless management, margin calls (loan leverage ratio), and an amazing set of accounting "challenges" are just a few of the things HERO has to contend with these days. I can't wait to see Q3 financials and hear the conference call to find out if there is any analyst with a clue to ask the tough questions just like Daniel Scotto did in 2001.
I don't claim to be the authority on the oil drilling industry like one person on this board, but let me attempt to give a comparison of Hero and the other oil companies.
#1 Hero 5 years in business.
#2 Rig 16 years in business.
#3 Noble 28 years in business.
#4 Parker 27 years in business.
#5 Pride 20 years in business.
#6 Diamond 14 years in business.
Hero has been in business only a short time compared to the other oil drillers. Which means the other drillers have had more time to make money and also pay off debt.
Hero had only been in business less than 3 years when our economy went into a major recession, and they have had less time than the other oil drillers to grow the revenue and pay down debt. It's called reality, and nothing that Hero Management could do but try there best to weather the storm until the business climate improves.
The lady expecting miricles needs to take some Valium and chill out.
It is time to threaten Obama and Ken Salazar of the interior department with law suit. Hero would have plenty of work if the interior department would release the permits.
It was only lip service when the ban was lifted, a ploy to get votes for the democrats, but we aren't stupid, it takes drilling permits too to put the oil drillers back to work.
Fire all the radical liberals on November 2, 2010 and show them we will get revenge for the hurt they have caused the oil drilling industry.
Vote Republican on November 2, 2010.
Rig 185 used to drill for ADC at a dayrate of 55-60K 3 years ago. They had a lucrative contract since then, but obviously the customer didn't have the cash to pay the rig till end of contract. So a new contract in the 60K-range is actually good news as it will add revenue.
Underwater inspection for 7 days? That's mandatory and if they can do this in just 7 days, then there's no reason to bash management.
The transfer of rig 156 will probably be explained during the conference call. But I'm quite confident this is a good move. Otherwise they would have left the rig right where it was...
Three years ago HERO was at $40+/share but like the 150k contract perhaps it was an illusion all along. Then again, three years ago HERO mgmt made the HUGE mistake of buying TODCO.
As for rig 156, don't assume HERO mgmt knows what they are doing because I've not seen a single act of innovation or intelligence just whining about everything except their own inability to act decisively.
HERO management's narrative is that it is a victim.
A victim of the Obama administration (it's not like democrats won office TWO years ago!)
A victim of the economy (based on HERO mgmt bad assumptions)
A victim of bad financing (based on HERO mgmt poor negotiation)
A victim of low nat gas prices (based on HERO mgmt poor forecasting)
A victim of ADC that didn't pay its bill (based on HERO mgmt poor vetting of customers)
A victim of bad weather & hurricanes (based on HERO mgmt inability to plan ahead)
A victim of the financial crisis (based on HERO mgmt living under a rock and not knowing what was happening)
A victim of slow sales (based on HERO mgmt not able to make a compelling case to sell their services & poor marketing)
But no one at HERO mgmt is to blame...the Finance, Marketing, Executive, and Sales department are completely free of blame because they are all victims.
Wow, it just occurred to me, you know who else are victims? The socialists and inept as they are victims of the economy, victims of Obama, victims of circumstances beyond their control; it's always someone else's fault like the rich corporations....oh wait HERO isn't a rich corporation hence its socialist victim philosophy.
The answer for poster MROPINE is simple.......
Go Ask Obama, he is to blame for the mess in the Gulf of Mexico.
Hero has received 12 drilling permits from the interior department in the last 5 months and the average prior to those dates was 11 permits per month. Hero would have plenty of work if our government would release the drilling permits.
While I'm no big fan of the current administration, you're saying that HERO's problems are all to lay at the foot of Obama?
How does Obama have anything to do with a rig in international waters that once had a day rate of 150k going down to 60k? Isn't this HERO negotiation skills?
How does Obama have anything to do with HERO's maintenance issues with the rig in India?
How does Obama have anything to do with sending a rig from West Africa over to Bahrain which will undoubtedly cost millions of dollars which HERO doesn't have?
Don't forget that HERO's mom & pop customers need Natural Gas to be above $7/mmBTU for them to drill otherwise they lose money. Are you saying that cheap gas is Obama's fault? My electric bill is coming in at $0.08/kw because gas is so cheap, that's a GOOD thing.
Are you part of HERO management to keep finding excuses for HERO mgmt? I've never seen a company's management whine and bellyache as much as HERO. "It's the economy, it's the regulations, it's the gas market, it's the weather, it's always something but management."
I guess in order for this company to be successful the economy has to be booming, nat gas needs to be at $12/mmbtu, a Republican needs to be in the White House, drilling permits need not be required, and financing needs to be cheap so that HERO management doesn't have to get off it's a$$ to do anything. Hmmm...I wonder how much of a bonus HERO mgmt will give themselves at the end of the year?