Big deal! The guy makes over $5 million a year & he buys a lousy 9800 shares? So much for having faith in your company.....
Free Cash Flows Unlikely To Cover Current Dividend
Transocean’s operating cash flows have averaged around $2.15 billion over the last three years, and it seems likely that they will deteriorate going into next year, given the weaker dayrates and utilization rates for ultra-deepwater rigs. The dayrates on Transocean’s recent contracts have been 10-15% lower compared to previous contracts, while ultra-deepwater rig utilization rates have declined by around 7% year-over-year as of Q3 2014. The company’s capital expenditures have averaged over $1.5 billion over the last 3 years, and preliminary capital expenditure guidance for FY 2015 stands at $1.9 billion, largely related to milestone payments for the company’s newbuild program. This means that the company is likely to see free cash flows (operating cash flows, less capex) of under $250 million, which would be insufficient to fund its $1.1 billion annual dividend. While the company could tap into its cash reserves ($2.87 billion as of Q3) or augment its debt load – which is already slightly above the industry average – to fund dividends, this could impact its credit rating. Transocean is just holding on to its investment grade status, with its credit rating standing at BBB- at S&P and Baa3 at Moody’s, with both firms holding a negative ratings outlook. It might make more sense for the company to prune down its dividend, while maintaining financing flexibility at this point.
Even if the company remains resolute about maintaining its current level of shareholder returns, dividends may not be the best avenue. For instance, the company’s stock price is down by close to 60% year-to-date and its trailing twelve month dividend yield stands at over 15%, which is well ahead of the cost of capital. Shareholders might actually be better off if the company deploys the $1.1 billion sum on share repurchases rather than on dividends, since it could prop up the stock price and potentially be EPS accretive for shareholders in the l
Schlumberger to take $800M writedown as it reduces seismic fleet
Schlumberger (SLB +0.3%) says it expects to take an $800M charge in Q4 to write down the value of six vessels and other assets related to its plan to reduce the size of its WesternGeco marine seismic fleet.
SLB expects to retire some older vessels, convert some others and cancel most of its third-party charters as it anticipates reduced spending by oil and gas companies in exploring for new sources of energy.
The moves would reduce the size of SLB's WesternGeco fleet to nine survey vessels and six source vessels, compared with 15 survey vessels and eight source boats at the end of last year.
Making new lows every hour. Nice! Now at a 14 year low with no end in sight.
So why in the hell would you buy this stock? Let me guess Uncle Carl said buy, so u fools bought . Un-real!
RIG – RIG hit its lowest level in nearly 20 years yesterday, and is now down 60% year-to-date. Puts traded over 170k in total, vs. the 1 month average of around 25k. Trader rolled put spreads, selling 22k of the Jan15 25/20 put spreads at 3.60 to close to buy 22k of the Jan15 19/15 put spreads for 1.00 to open.
Iberia Capital upgraded Baker Hughes (NYSE: BHI) from Sector Perform to Outperform with a price target of $65.00.
Wells Fargo raised the rating to Market Perform from Underperform, but lowered its valuation range to $13 to $16 from $20 to $26.
A bit late, Guggenheim analyst Darren Gacicia downgrades Seadrill (SDRL #$%$), Transocean (RIG -4.5%) and Diamond Offshore (DO +3.3%) to Neutral from Buy, finally admitting that downward pressure on oil prices and a potential for capital markets to become shy to fund newbuild deliveries has undercut the tenets of his previous bull thesis.
SDRL and RIG remain the most levered to deteriorating offshore market conditions, he says, believing SDRL shares may also suffer from an ownership transition from income to value investors and RIG perhaps sharing the same fate, with a 2015 dividend cut likely amid the potential for further asset writedowns.
At DO, Gacicia sees risk of a dividend cut, rig retirements and deteriorating offshore market fundamentals as negative near-term catalysts; in the space
LOl... Poor Carl he must hate these dam Arabs. Go get them Carl !!!
Billionaire investor Carl Icahn's company Icahn Enterprises (IEP) has significant holdings in a bunch of energy companies that have gotten annihilated since Friday.
In the third quarter, IEP announced a $355 million loss on revenues of $4.4 billion for the quarter. At the same time the year before, the firm took in $472 million of net income on a revenue of $5.8 billion.
In a release discussing the decline, IEP said that its losses were mostly on the investing side. A number of its holdings — mostly the energy companies that are getting pummeled no — sucked $270 million out of IEP.
And it's only gotten worse since last Thursday, when OPEC decided not to boost the price of oil by cutting supply.
So lets go over the damage as it stands now:
In October of 2013 Icahn disclosed a 61 million share position in Talisman Energy. Since then he's only doubled down on the stock, increasing his holding to almost 134 million shares, according to the most recent data collected by Bloomberg. In the last year the stock has fallen over 60%. It is now priced at $4.75 a share after falling from $6.22 last week.
Icahn's second largest of these energy holdings is in Chesapeake Energy. IEP owns over 66.4 million shares of the company. The stock closed down almost 15% last week from the beginning of the week to the short trading day on Friday.
Another clueless trader. Get real this option trader roll out of his Jan $22 puts into the Jan $18 puts. Learn to trade before opening up your big mouth. Fool!