Once they pay down the first $500mm, they pay down another $500mm with the earnings help of the Cobalt and Palladium. Repeat the process until all of the proposed JV Drillships are built and then you concentrate on reducing the debt.
No I'm not happy with the $1.87, but I do see that Bragg is making progress building the company. Revenue estimates for 2014 are a little shy of $900M, and earnings in the $.30 to $.40 range. We are building up cash and soon will begin paying down debt. With a little help from the lawsuits this stock is on it's way and I will have a real nice return because I loaded up with shares in the low to mid $1 range.
Can you find out if the customer has been successful finding oil? If they have been making commercial finds then there is a good chance that they will renew the lease. If results are disappointing, then look for them to release the rig.
Few of the Newbuild Drillships coming out are actually drilling in UDW. Drillers are building UDW Drillships and retiring Midwater Semi's built 20+ years ago.
1) I expect Titanium to earn the bonus with rev around $51m
2) Tungsten may have some downtime in the first 10 days
3) Emerald should show additional revenue
4) If the Sapphire is scheduled to start work on Nov 1 don't expect any standby.
5) Reimbursable items are a pass thur so they don't help.
6) Vantage is on an accrual basis so the Auditors won't let him hold out bills to make the qtr look good.
I still expect .02 - .04 for the quarter with the good news being that all the rigs will be working soon and that we are starting to build cash.
Permian Basin/Eagle Ford & Bakken are all regions that are enjoying renewed life because of fracking. Fracking just means that they inject water, sand and/or chemicals into the formation to allow oil or gas to flow more easily and increase the payout from a well. The problem with fracking is that it requires a lot of water and is expensive.
Fracking, or hydraulic fracturing, is the process of extracting natural gas from shale rock layers deep within the earth. Fracking makes it possible to produce natural gas extraction in shale plays that were once unreachable with conventional technologies. Recent advancements in drilling technology have led to new man-made hydraulic fractures in shale plays that were once not available for exploration. In fact, three dimensional imaging helps scientists determine the precise locations for drilling.
Horizontal drilling (along with traditional vertical drilling) allows for the injection of highly pressurized fracking fluids into the shale area. This creates new channels within the rock from which natural gas is extracted at higher than traditional rates. This drilling process can take up to a month, while the drilling teams delve more than a mile into the Earth’s surface. After which, the well is cased with cement to ensure groundwater protection, and the shale is hydraulically fractured with water and other fracking fluids.
During the 2008 financial crisis oil went below $40 BBL. Most Offshore Operators honored their existing contracts but rigs with contracts turning over were resigned at much lower day rates. Domestic Operators got crushed. Pride's stock went down into the $13 range but their was never any threat of BK.
Sheffield is among producers who’ve together invested $150 billion in the Permian since 2010 seeking their piece of an oil trove estimated to be worth as much #$%$ trillion. As the money pours in, risks are mounting of a bust as analysts including Marshall Adkins of Raymond James & Associates Inc. forecast crude is heading down to $70 a barrel next year, a price that would slow drilling in the most expensive U.S. shale formation.
While traditional wells have been drilled in the Permian since the 1920s, producers have become giddy over the potential of the region’s vast overlapping layers of oil-soaked shale rock. Pioneer Natural Resources Co. (PXD) estimated the remaining yield at the equivalent of 50 billion barrels, more than any field on Earth except Saudi Arabia’s Ghawar. The varied geology, though, makes it more costly to explore and develop.
Energy producers on average need oil prices around $96 a barrel to break even on wells drilled in Permian layers known as the Cline Shale and the Northern Mississippian Lime, according to Mike Kelly, an analyst at Global Hunter Securities LLC. That compares to average break-even prices of around $78 a barrel in the Eagle Ford Shale a few hundred miles east of the Permian, and $84 in the Bakken of North Dakota. Some areas of the Permian need a price of just $70-$74, Kelly said.
Older Midwater dayrates are in the 2's.
Operators who do not need a high spec rig will continue to contract them.
Drillers prefer to stack excess rigs to lowering rates on the fleet.