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Kulicke and Soffa Industries, Inc. Message Board

cben15606 34 posts  |  Last Activity: 18 hours ago Member since: Dec 8, 2006
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  • cben15606 cben15606 18 hours ago Flag

    "Industry observers have echoed Chow’s sentiment, citing $15 a barrel as the break-even oil price in majority of the shallow-water basins falling within the operational limits of jackups.

    Ramping up crude oil production will allow the leading OPEC member nations to enlarge their market shares, but for Mexico and India, it will be a necessary step towards ensuring energy self-sufficiency and conserving foreign reserves"

  • Keppel Sees Shallow-Water Projects Supporting Rig Demand amid Lower Prices

  • Reply to

    Squeeze!

    by dmj587 Jan 26, 2015 1:35 PM
    cben15606 cben15606 Jan 26, 2015 9:20 PM Flag

    OK now you're just making things up. Every one of you examples are false and/or distortions.

  • cben15606 cben15606 Jan 22, 2015 9:30 PM Flag

    Don't lose any sleep over this. Drilling rig contracts written by experienced drillers are probably amongst the most secure contracts in the world and it is highly unlikey Total could get out of it even if they badly wanted to, which they probably don't. They would need something of a Force Majeure set of circumstances or a failure of Paragon or the rigs themselves to comply with the contract.

  • HERO cold stacked another 4 jackups. I think that's ten jackups in the last two months. And probably ten jackups that won't drill again-six were already previously retired. Only thirteen of their 33 jackups have contracts. Really executing poorly vs PGN but to be fair theirs are mostly older mat-type technology jackups. But even their two newbuild jackups are still without contracts. I think that will change but ya never know in this market.

  • Haliburton and Schlumberger are pretty much in agreement that they expect a 25-30% drop in USA land drilling capex and I think most of that this quarter. Likely similar cutbacks in some Canadian regions too otherwise rest of world should see much smaller reductions in capex. Mostly flattish I think. Haliburton expects growth of US land oil production to then continue for about the next three quarters before falling off; the growth that is and not production from current levels, which will still be up vs today's levels.

    Haliburton did some nice historical comparison's to the last few troughs eg 2001 and 2009. The dropoffs in rigs and capex thus far being nearly identical to those cycles. They're expecting higher oil prices later this year it sounds like.

  • Reply to

    A solid FSR considering

    by cben15606 Jan 19, 2015 6:15 PM
    cben15606 cben15606 Jan 20, 2015 8:13 PM Flag

    LOL, nowhere in my post did I say "OpEx" and sorry but yes a $200-250 million loan matters when drillers determine how much rate they need to breakeven. In fact Paragon's happens to be, by far amongst the industry lowest in contrast to your implications to the opposite.

    You also state that Paragon has already purchased three newbuilds yet to be delivered, I'm sure you have another "technical" reason why that is true as well. But of course you know those three rigs will neither get delivered to nor paid for by Paragon.

    Going on, you also have stated Pemex will not be going forward drilling with any of Paragon's jackups. You say "Look at their investor presentation" Seriously? Pemex has not and will not address their use of standard jackups in their investor presentations. Drop in the budget-bucket. Most likely what is happening is Pemex and Paragon are working out longer contracts for these rigs at lower rates commensurate with their 2015 budget.

  • Three rigs drilling for Pemex and one in the middle east idled as expected. However, their NSea floater got a six month extension TO 12/2015 and two rigs I was expecting to be idled got extensions in the NSea(C20052) and Africa(L783).

    So things got a bit worse for Paragon this month but they are still printing tons of cash and will continue to do so if they continue performing in this gosh-awful energy market. Things will continue to worsen albeit hopefully at the pace of this controlled retreat. Undoubtedly there will be additional stackings in upcoming months. Pemex/Mexico rigs for example will probably see a few more rigs go idle. The buoy there being that Paragon seems very confident that all of these rigs will get back drilling once Pemex straightens out their 2015 budget.

    I read silly some post that alleged Paragon's old but updated rigs are much more expensive to operate than newer ones. Hogwash. PGN's rigs are about $60,000/day CHEAPER to operate than newbuilds. That is including higher capex for these older rigs. The reason being that financing costs for the typical newer, leveraged $250 million dollar(all in) rig dwarf those of a typical PGN rig which is leveraged to the tune of about $40 million on average and costs on average about $7-8million/year in capex/maint. Do the math.

  • Reply to

    Pemex layoffs-probly related to idled PGN rigs

    by cben15606 Jan 9, 2015 8:40 PM
    cben15606 cben15606 Jan 10, 2015 3:42 PM Flag

    Comes up with search of: "bay of campeche oil services layoffs" using either bing or yahoo.

    They not technically Pemex layoffs as they are contractors and i'm guessing this includes some of PGN's rigs. Tilley said last month these rigs rolling off were problematic in the near term at least until Pemex OK's their 2015 budget. He also added that they've seen Pemex' drilling plans for 2015-2016 and that all of PGN's Pemex rigs should continue to drill there.

  • FWIW, PGN divulged this info several times going back a few months but also stated it is temporary until Pemex 2015 budget gets sorted out.

    Business Week Jan 9, 2015

    More than 10,000 people working at Mexican oil service companies were laid off this week as state-owned Petroleos Mexicanos cut contracts in the face of the global slump in crude prices. More job losses are expected.

    Most of the companies are based in Ciudad del Carmen, on the Campeche Bay in the Gulf of Mexico, and were told this week that contracts wouldn’t be renewed with Pemex, as the world’s ninth largest oil producer is known. Job losses could rise to 50,000, Gonzalo Hernandez, secretary at the Ciudad del Carmen Economic Development Chamber, said in a phone interview.

    “The city is in shock,” Stuart Hill, managing director of Xperto Offshore in Mexico, said in an interview from Ciudad del Carmen. “We were told it was based on Pemex’s budget reductions.”

  • Any bump in EV/EBITDA wrt PGN, due to its disproportional effect of debt on EV, would be accompanied by an extreme movement in share price. PGN is riskier than Ensco but the reward is far greater and as we can see, the Paragon-like older ILC jackups is also a significant part of Ensco's current model.

    Comparing Ensco and Paragon, Ensco has a little over one third of their rigs(25) that are older jackups comparable to Paragon's, accounting for about 23% of Ensco's 2015 revs. Based on Ensco's debt,MC and 2015 estimated revs, Ensco's forward EV/EBITDA is about 5.4 while Atwood's is 5.5 and PGN's is 2.2.

    Since PGN's 2015 EV/EBITDA est is 2.2 and if one ascribes an EV/EBITDA of 2.2 to Ensco's est 2015 older jackup revs, then the rest of their fleet, by simple math, is being ascribed an EV/EBITDA 2015 est of approx 6.4{5.4=0.23*2.2 + 0.77*6.4} versus Atwood's 2015 est of 5.5 which is also about inline with Noble's forward EV/EBITDA of 5.6. In other words, without their older PGN-like jackups, Ensco is trading at an unjustified near 20% premium to comparable hi-spec fleets of Atwood and Noble.

    The way I look at this is that it is not so much that Ensco's hi-spec fleet is trading at a premium to their hi-spec peers as it is that their older PGN-like jackups are trading at a huge premium to Paragon's fleet and probably unjustifiably so. Either Ensco is overvalued or PGN is severely undervalued.

  • Reply to

    Street Doesnt Understand PGN.....

    by play_tow Dec 5, 2014 12:24 AM
    cben15606 cben15606 Dec 5, 2014 11:43 AM Flag

    There is near zero chance of bankruptcy anytime soon. If oil plummets and shelf drilling stops then they stack rigs and use their backlog to service debt since offshore rig contracts are very difficult to break and their customers should have no trouble paying. If you're this worried, maybe the best thing for YOU to do is sell YOUR shares.

  • Reply to

    Street Doesnt Understand PGN.....

    by play_tow Dec 5, 2014 12:24 AM
    cben15606 cben15606 Dec 5, 2014 10:54 AM Flag

    Paragon did not go $500 million into their revolver as you continue to allude to. They spent $200 million out of cash and revolver for the Prospector shares and the other $370 million thru mostly term loan which can be refinanced and some bonds. Remember too that not only do these rigs come with substantial backlog but probably for HPHT wells that Paragon's older rigs can't compete for. Absent a meltdown in the jackup market, I like the fact they are kind of doing all of: dividends, buying debt and at getting a couple good rigs that come with, most importantly, good backlog. As far as bashing Stilley, I get it. I know all about Hercules and Seahawk etc etc. I may bash Stilley one day, but not on those companies.

  • Reply to

    Street Doesnt Understand PGN.....

    by play_tow Dec 5, 2014 12:24 AM
    cben15606 cben15606 Dec 5, 2014 9:44 AM Flag

    Stilley appears to have a good background for
    managing Paragon. As to the bankruptcy of Seahawk I think his background
    and the then foregone conclusion that Seahwak would not survive as a
    standalone driller is likely why he was hired by Pride to run Seahawk.
    GE's Jack Welch could have been at the helm of Seahawk and Seahawk's
    destiny would not have changed. The mat supported JACKUP
    industry was on its deathbed then and I doubt any thoughtful person
    felt Seahawk, as a pure play mat supported jackup driller, ever had the
    slightest chance surviving alone.

    When Seahawk separated from Pride, it had a lot of debt, 20 mat
    supported jackups with an abysmal 40% utilization and very low
    dayrates($50KPD). Two rigs were warm stacked and ten cold stacked.
    Essentially meaning ten of their twenty rigs were expected to never
    drill again. Contrast that to Paragon which has maybe 2 or 3 of their
    rigs out of 44 which are cold stacked and dayrates several multiples of
    $50KPD.

    And I think he did a good job at Hercules the years he was there. GOM shelf drilling business this last ten years is a tough road for even the best. Fortunately, Paragon doesn't do GOM shelf drilling and uses ILC jackups.

  • cben15606 by cben15606 Dec 3, 2014 11:07 AM Flag

    Guarded but very optimistic call I thought. Added more shares this AM in the 2's.
    -Could idle some Pemex rigs for a month or two but that market is looking very, very strong for PGN once Pemex gets thru their short term budet issues.

    -Surprisingly bullish on 3 of their 4 Brazil floaters statying working long term for Petrobr#$%$

    -Expect more long term jackup contract announcements next few months

    -Tilley expects the two new prospector rigs to drill for 5 years each for Total including options. That would end up making Paragon look very smart in that purchase.

    -Guardedly optimistic on the old but highly efficient upgraded fleet versus newbuilds. Cited example of very recent Indian tender for new jackups only at dayrate in the 80'sKPD. After there were no takers, tender was replaced accepting older rigs at same dayrate.

    -The ususal jackup/shelf stuff: shelf much more economic at low prices; operators not squeezed as much as some deepwater projects; PGN's older jackups competitive with newbuilds on most jobs but at near half the dayrate; jackup tenders haven't slowed and dayrates aren't falling(yet?).

    -Bonds trading at 50 cents I think he said. Said they're exploring everything incl buying debt, shares, new rigs with good backlog etc. Said they are close to their 2.5 debt to EBITDA now after the Prospector purchase but still have a LOT of options

  • Reply to

    What's the deal here?

    by bradfordwinstonhall Nov 28, 2014 10:47 AM
    cben15606 cben15606 Nov 28, 2014 8:11 PM Flag

    NADL is a great value long term but your rosy statements are incorrect. Their fundamentals currently are deteriorating as within a few weeks they will probably stack their highest paid rig and cold-stack it at that.Probably wont work for at minimum a few quarters, possibly much longer. Medium term is also in much doubt with the Russian sanctions. Not going bankrupt, rather a messy period. Good time to buy for the long haul but be realistic.

  • Reply to

    Within 2 years UVV will be at $60/share

    by dave7613 Sep 19, 2014 8:52 PM
    cben15606 cben15606 Nov 23, 2014 9:47 PM Flag

    CEO bought $100K worth last week

  • Reply to

    Prospector call

    by dmj587 Nov 17, 2014 12:45 PM
    cben15606 cben15606 Nov 17, 2014 2:28 PM Flag

    Thanx for the post. I have not listened to the call but if I am reading your numbers correctly then you are implying Paragon put up $1.25 Billion for these five rigs. I don't believe that is correct but have not listend to the call.

  • Reply to

    I don't like the huge write off.

    by longtimefollower Nov 16, 2014 12:16 AM
    cben15606 cben15606 Nov 17, 2014 1:49 PM Flag

    You like price to book when market cap is dwarfed by debt? Good luck with your stock there-you'll need it! May want to compare backlogs and EBITDA/EV which is a better metric of future cash flows. Whose backlogs are actually still being maintained? Paragon's. You like price/sales? Whose projected sales are cratering? HERO's. Good luck with your "regimen"...you'll need it!

  • PGN bought Harsh environment #$%$ Prospector(PROS.OL)'s five #$%$s. Price looks to be about $800 million all in including about $200M for outstanding shares and $600M for remaining payments due on three Jackup 2000Es still in the yard(see p.6 of Prospectoroffshoredrilling's latest Sept/2014 investor presentation). These three will be in addition to two currently drilling Prospector Jackup 2000Es for a total of five.

    That would work out to be about $160 million per rig. By contrast, Seadrill, about a year ago, bought one of the other Prospector Jackup 2000E(prospector 3) rigs for about $250M all in. Looks like about a 35% discount for PGN

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