SDRL has a balance sheet that only Bear Sterns or Lehman Brothers would love. If they have nothing to worry about why do they have to keep selling off their rigs with contracts in place?
There it is in black and white. HAL has all the technology and NES is nothing more than a trucking and storage company. Where do you think all the profits will be going?
*** I liked the notion that they were working with the platform operator to take more gas to test the limits of the wells and to make up for the lost production in the first quarter due to the stuck valve. ***
Ask ATPG how it worked out for them when they let 'er rip and sanded up their last well.
The pink sheets are littered with plenty of small oil and gas companies that over-extended their balance sheets trying to buy time until their "tremendous field" started producing. What evidence has this team given that they can realize the rosy production figures they predict?
How much of their future production has already been sold off in hopes of prolonging the inevitable demise just a little longer?
But all the fanboys did indeed claim SDRL would be immune because they had the youngest and bestest fleet in the world. There was nothing to worry about, other companies would have to slash their day rates but SDRL could keep raising theirs to infinity.
Too bad they keep selling off all those new rigs so JF can keep collecting his tax-free dividends in Cyprus.
Also, the hard assets of Enron (pipelines) weren't the cause of their problems. It was the paper assets and financial chicanery that sunk them.
Do you honestly think SDRL could have sold their interest in the rig for $1.24 bln to anyone other than SDLP? The term related-party transaction is a red flag for a reason.
You think they are guaranteed to see that $20B? Do a quick calculation on what happened to the West Capella's backlog after Total dropped from 5 years to 3 years. The 8% increase in day rate doesn't make up for the 40% drop in days.
ATPG was the only other company I saw that could screw up as bad as these idiots.
You may want to consider buying the stock of those companies then.
** Second domino to fall is TFI sale. Shorts getting nervous because they will send this 20+ in a second. **
Heckmann bought TFI (or at least announced it) on March 8, 2012. The old Heckmann Resources stock closed on an adjusted basis at $52.90 that day. $20 is still a loss of 62%.
Slorer is an idiot. He put SLB on their equivalent of a top picks list within a couple of days of its 5 year high. He took it off the same list within a few weeks of its following low level mark. He kept pounding the table that SLCA was worth about $12 when it went from $15 to $30+
He's no more qualified than the average joe to be making recommendations about these companies.
That sounds similar to the North America pressure pumping crash that hit full force in 2011. People were worried about all the supply coming online back in 2010 but most companies said it was nothing to worry about. Of course what do you expect them to say, "Oops we sunk a few billion in some kit that's going to be sitting idle a few years"? These executive have stock option bonuses to worry about so they aren't going to let something like the truth get in the way.
Never mind. Just when you think this management team can't do any worse; they do. Pre-tax margin of 7% and a tax rate of 41%. AYFSM?