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China Housing and Land Development, Inc. Message Board

hdoe1000 12 posts  |  Last Activity: Jun 24, 2015 6:23 PM Member since: Jan 2, 2008
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  • Reply to

    Financial model

    by hdoe1000 Jun 24, 2015 9:41 AM
    hdoe1000 hdoe1000 Jun 24, 2015 6:23 PM Flag

    From Evercore ISI’s 2015 Mid-Year Global E&P Spending Outlook. - Survey of 300 global E&P companies.
    Oil prices above $70/bbl would prompt more than 70 percent of the survey respondents to revise budgets upward by at least 10 percent, while around 90 percent would raise budgets by at least 10 percent if oil reached $80/bbl levels
    Evercores says, given the significant underinvestment occurring this year and . “Given revised oil demand forecasts, the model oversupply present in the market will likely be erased by year-end, and 2016 could prove to be a very tight global oil market. This tightness, leading to higher oil prices, will in our view drive a substantial recovery for worldwide exploration and production spending.”

  • Reply to

    Financial model

    by hdoe1000 Jun 24, 2015 9:41 AM
    hdoe1000 hdoe1000 Jun 24, 2015 3:37 PM Flag

    Well, I did model 2 jackups at $110 and 2 at $0.

    Regarding the Cobalt, the least risky solution would be to walk away from the contract. But there might be penalties. The second best solution would be a substantial delivery delay.

    The key in the next months is the crude price. And that depends on Opec/Saudi behavior. If Opec starts respecting it's self imposed production ceiling, meaning that the Saudis lower production to their habitual volume, the crude price would get a serious lift. A recent survey among oil producers indicate higher investment budgets if crude moves above $70 again. The type of crude (Brent/WTI) wasn't specified.

  • hdoe1000 by hdoe1000 Jun 24, 2015 9:41 AM Flag

    I've updated my VTG financial model.

    Assuming that two Jackups remain ready stacked for the rest of the year and the two others get renewals at 110k/d, further assuming no unusual operational hiccups, I am getting cash flow from operations around 220M - assuming cleaned total opex per ship of 220k/d. If the company could bring that number down to the level of ORIG or PACD (200k/d), cash flow would be 20M higher. Cash flow from operations is of course after debt payment.

    In May, ONGC has published a tender to contract 5 floaters for deepwater operations. With Platinum's excellent track record with ONGC, VTG has a good chance to get one of those contracts - although at a reduced day rate - most likely around 400k/d.

    Regarding the Cobalt, the company will not do a deal that isn't at least cash flow neutral in the short term - possibly further delaying delivery.

    Assuming for 2016 average rates of $400k/d for Platinum, Cobalt and Tungsten (after contract expiration), Jackup occupancy of 50%, the 2 others contacted at 110k/d, cash flow from operations would fall to around $100M. Cashflow-wise, 2016 is probably the low of the cycle.

    With the ongoing trend of scrapping/cold stacking of older semisubs, the size of the available floater fleet will probably be at least 10% lower by the end of 2016 (taking into account all projected deliveries) , compared October 2014.

  • Reply to

    Emerald Driller now Ready Stacked

    by dtedward Jun 18, 2015 10:08 AM
    hdoe1000 hdoe1000 Jun 19, 2015 2:25 PM Flag

    Which jackups do you mean? in their list, I see two 30+years old available.
    As to Ensco's 8500 semisubs, two are getting cold stacked and one is available.I think that for semisubs, it's even more difficult to get a contract currently than for ships, but there also a few class 6 ships looking for work.

  • hdoe1000 hdoe1000 Jun 19, 2015 6:40 AM Flag

    @kittni
    Thanks for sharing that information.
    I think that the Hero Chapter 11 announcement (not very surprising to the initiated) drove the whole sector down, fueled by professional short sellers.

  • Reply to

    Emerald Driller now Ready Stacked

    by dtedward Jun 18, 2015 10:08 AM
    hdoe1000 hdoe1000 Jun 19, 2015 6:29 AM Flag

    It was not that bad for Ensco. For the DS6, they negotiated a temporary day rate reduction of 50k/d to July 2016 (from 630k to 580k) , subject to upward adjustments, but also a contract extension for one year after July 2016 at that excellent rate (in the current environment). The contract period for the Class5 DS 1 (360k/d) was reduced. But on balance, the deal added to Ensco's revenue backlog.

  • ORIG's contract status is probably the best in the offshore drilling industry

    E Raude -2015-12
    Olympia - 2016-06
    L. Erikson - 2016-10
    Mylos - 2016-10
    Athena - 2017-03
    Poseidon - 2017-06
    Mykonos - 2018-03
    Apollo - 2018-03
    Corcovado - 2018-06
    Skyros - 2020-Q3

  • Reply to

    Only 5 of 13 rigs contracted past 2016

    by daniel_92648 Jun 11, 2015 8:21 PM
    hdoe1000 hdoe1000 Jun 12, 2015 9:26 AM Flag

    to be precise:
    with "past 2018" I will say "into 2018". One contract ends in 2020.

  • Reply to

    Only 5 of 13 rigs contracted past 2016

    by daniel_92648 Jun 11, 2015 8:21 PM
    hdoe1000 hdoe1000 Jun 12, 2015 9:20 AM Flag

    "Only 5 of 13 rigs contracted past 2016"
    Not true!
    4 floaters have contracts past 2018 and two into 2017. Orig has one of the best contract coverages in the industry to go through the slump. An the rates are very healthy!
    "Petrobras which has been cancelling contracts" . The two Seadrill orders that Petrobras "cancelled" had not been finally signed. In that sense, there was not contract cancellation. Premature cancellation of firm contracts would lead to huge compensation payments by Petrobras. That's the difference to contracts with Pemex or Aramco.

  • Reply to

    here are the pertinent details

    by divin4tacos Jun 3, 2015 9:44 AM
    hdoe1000 hdoe1000 Jun 3, 2015 10:02 AM Flag

    Thanks for the details. It's indeed weird that those details were not included in the official announcements.
    I wonder who is getting those shares.
    Why that 20% dilution at less than 30% of book value, when the debt level is reasonable and the order book is one of the best in the industry?
    It's the dividend. The dividend is essential for the survival of DRYS and George wants to have enough cash for this, even if the Driller's slump extends into 2017.

  • hdoe1000 hdoe1000 Apr 7, 2015 9:21 AM Flag

    If you mean Su's countersuit: that's BS. His lawyers routinely countersue to make things more complicated for the claimants and hope to get the claims against him dropped or reduced. As far as I know, that makes his lawyers rich but usually gets Su nothing except time. On the other side, I don't know if the company's claims against him have any merit. The parties are supposed to be in arbitration now.

  • (April 6, 2015)
    Market Cap /2015 Cash Flow:

    PACD: 2.70
    VTG: 0.48

    (VTG:$ .31/sh, PACD $4.2/sh)

    That's a whopping factor 5.6!

    Is there a reason for that? – Not really, as the comparison of some financial data show.

    Both companies do have modern fleets, while fleet sizes aren't too far apart. Assuming that 4 jack-ups = 1 class 6 ship (Ebitda wise), the Ebitda capacity currently stands ad 7:4. By the end of 2016 it should be 8:5 in favour of PACD

    For 2015, -VTG's fleet capacity is 87% covered by contracts, for 2016, It's slightly below 50% (assuming that the Cobalt starts working in 2017)
    For 2015 PACD's fleet capacity is 70% covered by contracts, for 2016, it's 50% (assuming that Zonda starts working in 2016)

    No advantage for PACD here!

    Assuming that class 6 day rates remain around 400k/d this year, that the 2 idle PACD ships get a contract at the beginning of May 2015 (optimistic) and that VTG gets jack-up renewals around 115k/d, I obtain the following results (ship operating ratio 92.5%) for 2015:

    Cash EPS (=Accounting EPS excluding deferrals and non cash interest costs)
    PACD: $ 0.33
    VTG: $ 0.24

    Cash Flow:
    PACD:340M
    VTG: 200M

    Net debt, end of year:
    PACD: 2850M (excluding the Zonda financing, which will add 400M)
    VTG: 2580M (after the Cobalt prepayment)

    Annual Revenues/ Net debt:
    PACD: 0395
    VTG: 0.315

    That 20% ratio difference doesn't justify the valuation ratio difference.

    Sentiment: Strong Buy

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