what I'm hearing is that analysts are concerned about softness in demand and they would like to see longer term contracts -
Yes i agree when they drop all refineries in to the mlp thevreal value will be unlocked but the market expects this fully so it will be priced well before.
What i dont agree with is you talking about dilution as a foregone conclusion though. They are financing 550 with a 7 yr note and are on schedule to report about $330-350 million of net income this yr. if we assume taht the brent spread will remain above $10 and the added cash flow from the acquisition there should be no reason for any additional financing
on etrade - but it gives no details - hopefully they have a high price target as well. We made the jump to $36.90 this morning as soon as this upgrade hit my account, so I don't think it is wrong info
UBS upgrade - couldn't find the price target though
Below is from the presentation and it sounds significant!!!
Five-year contract extensions on the Hercules
261 and Hercules 262
Total potential revenue of approximately $465
– Equates to an average dayrate of $125k - $130k
per rig, an increase of over 50% from current
– New dayrates will commence in late 4Q14
Strong indication of customer’s desire for, and
longevity of jackup rigs of this class
Positive reflection of Company’s relationship
with world-class operator
Commodity Units Price Change % Change Contract Time(ET)
Crude Oil (WTI) USD/bbl. 107.97 -0.83 -0.76% Oct 13 09:15:51
Crude Oil (Brent) USD/bbl. 114.99 -0.17 -0.15% Oct 13 09:15:41
It's $7 now
hope the spread gets closer to $10 and stays there - and it could happen with Egypt situation
I missed the CC and am listening the tape now. The excuse we got for no contract for discover rig yet is bc the co is looking for a long term contract and is not considering anything under 12 months! He also said they have not been the lowest bid on a number of occasions.
it sounds like bs to me and they seem to have set their own expectations to high on the day rate.
I hope the analyst asked more questions on that
Ahhh "how did they know" - another reminder that we are but pawns in this game. Hey nor where do you think the BI/WTI spread is going.