Listen to the 2Q Conference Call. It's part of CFO Doug Smith's 3Q guidance, and the main reason for the 3 cent estimate. As for the LMRP part, I have no idea what this is, but it looks like the rig can't operate without it, which is why the rig was down for 29 days.
Looking to the future guidance for the company. The guidance for the third quarter, unfortunately, will be negatively impacted by the Titanium Explorer having downtime associated with an LMRP connector. This has currently anticipated a result of approximately 22 days off contract in the third quarter.
Q3 will be worse than Q2.
Titanium had 7 days down time in Q2 due to a broken slip joint. The rig was off contract for 22 days in Q3 due to this LMRP connector. Thirty days of downtime is a lot of lost revenue.
I'm not happy with the earnings, but I see no reason cussing Bragg.
Petrobras is the problem, not Bragg! Mob rates are industry standard!
1) Replacement of Titanium engines = PBR was not ready to drill and didn't want to pay standby so they found a minor problem with the rig.
2) Mobilizing the rig to West Africa = PBR stalling because they were not ready to drill in the GOM.
Pride went thru this with BP on their first rig. Their GOM project was not ready because of the Gulf spill so they mobed the rig to West Africa for a couple of years before mobing it back to the GOM.
Since PBR is mobilizing the rig back to the GOM maybe they are ready to drill. It's hard to tell but this is costing them more than it is costing Vantage.
I'm not advocating building the company with debt. You can't build an offshore driller with $275M.
You need to take on enough debt to get the core fleet working and generating cash. We are at that point today. $950m in revenue and $200m in cash flow. Add the Cobalt and we are over $1B with a cash flow closer to $300m. Now we need to work the rigs and pay down debt to get the balance sheet in line with industry norms. Future expansion should be made for cash from operations with a little debt mixed in.
Day rates go up and down. If we see a pause in the shipbuilding we will soak up the supply so that Operators will be forced to choose between a 40 year old mid-water semi or a 5-10 year old rig like the Platinum. Remember the crash in day rates back in 2008 is what led to the $750 contracts that you saw a year or so ago.
I'm not worried about financing to Cobalt. If it looks like they will have trouble financing the rig they can stop paying down debt and apply the funds to the down payment.
I can't see a Texas jury giving Su anything on the counter suit. I have read part of the court documents and I can't see where Su lost a lot of money on his investment in Vantage.
I'm not that interested in the short term price of the stock. I'm watching Bragg build an offshore driller. He has a core fleet and now he needs to pay down debt before he can expand his fleet. This is how Pride and Ensco were built and Ensco's stock is in the $50 range. I would love to see us win the Su lawsuit and retire his shares, but the most importing thing is that he is gone.
Do you really think this little down period will hurt the drillers long term? If so how?
Oil & Gas is a roller coaster and has been for 50 years. Nothing new here.
The new build rigs will find jobs, old rigs will be retired, and drillers will stop building for a couple of years.
Oil and Gas is self balancing.
Game over - What the hell does that mean? You have been predicting it for years and nothing ever happens.
Do you really think Su can convince a Texas jury that he was harmed to the tune of $8B?
Ensco is replacing 30+ year old Semi's with New Build Drillships.
Would you rather pay Vantage Prices for a new drillship or work a 30+ year old semi?
Dayrates include $600K for the drillship + another $400K for other contractors.
Did you notice how fast the Tungsten drilled their Malaysian Wells. Much faster than the contract had budgeted for the work.
They pay the dividend on Sept 19th, but it could be a few days before you broker makes the cash available to you.
In late October, early November they report 3Q earnings. Expect revenue to be up 2%-3%.
In late 2015 the DS-8 & DS-9 leave the shipyard and mob to their assigned locations.
ZD, you make me laugh. The Oil & Gas Industry is considered a very speculative industry. It is not uncommon for companies to spend hundreds of millions of dollars and never find a drop of oil. They explore until all the raised capital is gone and they file bankruptcy then move on. Even when they are successful it takes years before you see any revenue. Again, It is not criminal to fail! It it not criminal to have a low rate of return. It is not criminal if you stock price does not meet investor expectations.
In Bragg's case he is building a very successful company. He told you how he plans to build the company, and he is executing the plan. He is on pace.
1) Build the Rigs
2) Get the Rigs working
3) Refinance the debt
4) Pay down the debt
5) Add to the fleet.
Your problem is you know nothing about what is normal in the industry and you are only looking at stock price.
Bragg has increased revenue from $0 to $900M in a couple of years.
That's Google type growth and Bragg should be rewarded for his efforts.
If you don't like Bragg "Sell & Move On"
Ensco has already released this info.
Ensco plc (ESV) announced today that its Board of Directors has declared a regular quarterly cash dividend of US$0.75 per Class A ordinary share payable on 19 September 2014. The ex-dividend date for this payment is expected to be 4 September 2014, with a record date of 8 September 2014. Ensco’s dividend yield is among the top five percent of S&P 500® companies.
I am an Accountant with 30 plus years in the Oil and Gas Industry.
I am also recently retired having worked the last 8 years at Pride & Ensco.
As for the "Big Bath" it is no unusual for the incoming CEO to want to get all the bad news out of the way in the beginning of his watch. The goods news is when we dispose of older mid water rigs we will not have to book loses on disposal.
The entire offshore drilling industry is down. Analysts are worried about the number of new build drill ships coming to market in the next few years will hurt day rates. The driller's response is to retire and sell off old semi's so that supply/demand is in balance. If you do decide to buy more shares, remember we are at or near the bottom.
It is my understanding that the two production platforms and the six development wells are intended to get Etame production back up above 20K bbbls per day and keep it there until around 2016. The real increases in production will occur when we get the N'Gongui and Venus fields on line.
As for the 700mmbo exploration upside, I don't think the market is giving us anything for this as we have had control of Angola Blk 5 for eight year and have not seen a drop of oil. If and when we make a discovery in Angola I expect that the street will take notice and up the stock price.
The biggest problem with Vaalco is that we are two years away from greatly increasing production.
You just have to be patient. Wall Street is not going to bid this thing up 2 years out.
The six development wells are intended to feed the two new production platforms.
See page 10 & 11 on the June 2014 RBC Global Energy Conference Presentation
New Etame Platform - 3 wells & 10 MMBOE incremental gross reserves
SEENT Platform - 3 wells & 7 MMBO gross reserves