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OmniVision Technologies, Inc. Message Board

cben15606 24 posts  |  Last Activity: Jun 19, 2015 11:56 PM Member since: Dec 8, 2006
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  • Reply to

    Brazil and Mexico

    by cben15606 Jun 19, 2015 8:20 PM
    cben15606 cben15606 Jun 19, 2015 11:56 PM Flag

    I do think more bad news is probably yet to come out of Brazil and agree the latin NOCs are the pits. But I also think Brazil has made a stronger commitment to ramping production than Pemex. As bad as Brazil/PBR may be, I don't think they approach how bad Mexico/Pemex are. PGN has also won some nice customer service awards down there which is promising, provided they didn't "pay" for them. And I think one or two of PGN's floaters are amongst a very small group of rigs in that part of the world that can do shallower work efficiently. So I think they have a good chance of not being cancelled.

    Mexico is on the cusp of change. Campeche Bay drilling sans Pemex will be a new order of the day before long. There will be actual-for-profit aggressive IOCs complete with contract cancellation penalties. And those projects won't nearly as long to start as those UDW ones. Probably a lot of infrastructure already in place. So even Mexico is looking bright for PGN I think.

  • Reply to

    Brazil and Mexico

    by cben15606 Jun 19, 2015 8:20 PM
    cben15606 cben15606 Jun 19, 2015 11:38 PM Flag

    "by end of year over 60% of PGN rigs will be idle"

    Right, your argument is that not a single rig from now till end of year, or in the next seven FSR updates, will find work. And three rigs found new contracts and/or extensions in the last month alone. You trying to be funny?

    "and those that are getting contracts are at drastically reduced day rates"

    All three signed at profitable dayrates. In fact the three year L784 contract at $93KPD is comparable to dayrates for a couple of their other Middle East jackups and not that far below the $110KPD Ensco got for three year contracts for Hi spec newbuilds. That's great execution by PGN. And if they can buy debt with cash flow from the L784 etc, that $93KPD may be comparable to a dayrate of $130-140KPD when bonds are at face value,no? Exactly!

    HERO signed 5 year ME contracts for $65KPD-that's a drastic reduction.

  • cben15606 by cben15606 Jun 19, 2015 8:20 PM Flag

    By the end of the year PGN should have a good bit more visibility to two crucial regions: Brazil and Mexico.
    Brazil is significantly revising their 5 year capex plan downward and can cancel contracts on a dime without penalty, unlike PGN's IOC customers. While I wouldn't be surprised to see rate cuts I do not expect PBR to stop drilling with PGN's floaters for a couple of reasons.

    Also, Mexico will start auctioning off shallow water blocks in less than one month, aggressively. Fifteen blocks next month and nine more in September. We won't see jackup tenders for those blocks by the end of the year, I don't think. But we will at least I think start seeing by year end that a significant incremental supply of jackups will be needed in Mexico. This demand will come from the 27 IOCs/consortia bidding on those blocks and will not happen immediately but the writing will be on the wall.

    Add to that demand from Pemex that may materialize due to their short-sighted/reflex idling of jackups(Pemex production continues to plummet), and I think there eventually may well be a shortage of jackups in Mexico in 2016. To compete with PGN jackups, the majority speculative newbuilds in the yards I think would have to be sold at fire-sale prices to drillers who are highly levered and probably with very little appetite to buy more newbuilds only to contract them at low-ball dayrates.

  • probably due a breakout one way or the other

  • 7.25's more active but 6.75's being traded as well. 41 cents on the dollar. Most being reported by buyer, not sure what the significance of reporting party is, if any.

  • Reply to

    Not bad FSR

    by cben15606 Jun 15, 2015 4:21 PM
    cben15606 cben15606 Jun 15, 2015 4:33 PM Flag

    $122 million backlog added

  • cben15606 by cben15606 Jun 15, 2015 4:21 PM Flag

    Mexico bad as expected. Nice work re-upping rigs in India(floater MDS1), Middle East and Africa. The ME and Africa rigs had been idle I believe.

    M826 in Africa signed at 105KPD. Good dayrate considering. Well above recent Africa old jackup contract by Hero for 75KPD and Noble ME contract for 85KPD. Shorter term Paragon contract though explains at least some of the difference.

  • Reply to

    Paragon Rig M826

    by bigluke21 Jun 15, 2015 2:40 PM
    cben15606 cben15606 Jun 15, 2015 3:30 PM Flag

    "The contract carries a minimum duration of 90 days and a minimum financial commitment of $21 million excluding withholding tax."

    Interesting. $21 million minimum over 90 day min implies a pretty good dayrate.

  • "we have increased financial flexibility and are evaluating options for the use of the proceeds, whether it be to retain the cash in order to increase our liquidity or to further strengthen the balance sheet through debt reduction."

    Notice nothing about buying rigs but are considering debt reduction, read bond repurchasing.

  • Reply to

    Explanation of deal this morning?

    by greedorfear Jun 4, 2015 10:05 AM
    cben15606 cben15606 Jun 4, 2015 11:01 AM Flag

    The Prospector rigs are jackups, not deepwater. Their average dayrate between the two rigs is just over $200KPD so PGN will net about $130KPD for each rig initially and then pay all operational costs(crew etc) which for these rigs are probably around $65KPD+/-. The lease rate of $71KPD appears to be in effect for the initial term of the Prospector rigs to Total with lease rate going to $42-43KPD thereafter at which point net to PGN will depend on the options, dayrates then. To keep the same "net" PGN would need contracts in the range of $100-120KPD I think.

  • Reply to

    Explanation of deal this morning?

    by greedorfear Jun 4, 2015 10:05 AM
    cben15606 cben15606 Jun 4, 2015 10:32 AM Flag

    "purchase of outstanding debt unlikely"

    Maybe but when PGN commented they would wait at lest till end of year or next year to consider buying debt this was the same timeframe they described in paying down the revolver. They've shown with this deal that they are smart so with most of the revolver now paid, not a big leap I think to see them buying debt.

  • Reply to

    Explanation of deal this morning?

    by greedorfear Jun 4, 2015 10:05 AM
    cben15606 cben15606 Jun 4, 2015 10:24 AM Flag

    A few positives to get the ball rolling, others chime in.
    1. Revolver is nearly paid off now if they wish. This is shorter term debt so this could mean no more substantial debt due for a few more years.

    2. Now have cash to do more "creative" things. This could include buying discounted debt, which I am almost positive they will do and would be great. Could also mean buying distressed newbuilds which I think may also be a good move depending on price and dayrates.

    3. The deal gives PGN a favorable dayrate in the back half of the 5 year lease-back. While the timing of the Prospector acquisition was not good, I think this deal will allow PGN to at least recoup its investment of $550million or so over the next 5 years. That's good news.

    4. Shows management is on the ball.

    5. Don't see much in the way of negatives for PGN. They lose ownership of the rigs but even then, at the end of the lease this Sino outfit won't want to own the rigs so PGN will probably have the option of repurchasing the rigs at a steep discount.

  • Reply to

    Strange trading

    by jyoung01 May 26, 2015 1:27 PM
    cben15606 cben15606 Jun 3, 2015 1:16 PM Flag

    14 shallow water Mexico blocks in July and then another 9 shallow water Mexico blocks in September. ONGC and middle east also looking for quite a few more jackups apparently-Saudi Aramco just signed up three HERO 30-year old jackups for 15(!) rig years and may add as many as 30 rigs to their fleet this year and next. And most jackup drilling solidly profitable at these prices i.e. healthy demand out there for jackups.

    Still no sign of anyone rushing to put all those speculator jackups in the yards to work and many drillers' newbuilds delayed i.e. reasonably healthy jackup supply.

  • "UK North Sea-focused junior oil field Xcite Energy reported its first quarter results Friday, confirming that full-field costs for its Bentley field development work out at $35 per barrel."

    And the NSea is one of the more expensive regions in the world to drill.

  • From rigzone:

    "shallow oil and gas fields in Africa could not only be profitable to international operators, but oil fields in particular could prove lucrative for many indigenous African companies looking to grow and provide wealth for their own countries."

    "Eni SpA’s Nene Marine Field off the small stretch of the Congo coast could serve as inspiration to operators in this interim period. “This is a pre-salt play in shallow water. It’s cheap and easy to develop,” Hayman said. Angola also has shallow oil fields ripe for development."

    “There is a huge inventory of already-developed small fields. As a result, Millheim said this has created a “huge” market for indigenous oil and gas companies. Fifty or 60 dollars a barrel can still be profitable. The prize is pretty good.”

  • Reply to

    Strange trading

    by jyoung01 May 26, 2015 1:27 PM
    cben15606 cben15606 May 26, 2015 4:02 PM Flag

    Doubt it. Some news out today Mexico is moving ahead quickly on selling leases in upcoming bidding rounds. There are 14 blocks around Campeche Bay that will be bid on by 26 different companies/consortia July 15th and represent new drilling and all of them are shallow water leases that will be drilled by jackups. Mexico is already woefully short handed as it is when it comes to jackups without these upcoming leases and PGN's jackups are still excellent options for most of the drilling needed save for the deepest wells.

    Mexico and Pemex are going to need a lot more jackups.

  • cben15606 cben15606 May 20, 2015 1:37 PM Flag

    Agreed and more to the point, if the real-life drillers are pushing out jackup deliveries further, then things probably will be bleaker for the speculative jackups coming to market as well. Ergo, more runway for Paragon.

  • out to 2018 earliest. Possibly out to 2020.

  • Reply to

    Cloud business

    by go_gatrz Apr 23, 2015 4:26 PM
    cben15606 cben15606 May 11, 2015 10:38 AM Flag

    Hey dfm, good to hear from you n made my day too:-))

  • Reply to

    Cloud business

    by go_gatrz Apr 23, 2015 4:26 PM
    cben15606 cben15606 May 9, 2015 11:11 AM Flag

    "on the margin side, we inherited a business that had a lot of good technology... .needed to really be optimized"

    Probably at least in part referring to Xyratex' file system software(eg Lustre, Hadoop, Clusterstor etc). This part of Xyratex was growing fast before the buyout and was very high margin. But it was being run like an insulated fast growing start-up within the XRTX divisions. So they probably still aren't making much profit if any. Should compliment CSS nicely though as STX continues to evolve.

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