3:30 PM Thurs
I think it will very difficult for the off-shore drillers and NADL in particular, to stop
dropping when Brent spot continues lower ........and Brent was lower today.
This relationship occurs over & over with the high beta drilling stocks. Superimpose
this action on the NADL issues and it will be difficult to reverse higher without new
surprising positive news from the EU/USA.
NADL, IMO, will be offered lower in the future.
Where have you heard that arctic drilling rig utilization is near 100 % ....?
This would be very good news for NADL, specifically.
I also agree with your point that client diversification is a good thing.
But early this summer it looked like Rosneft really had the CASH that
JF needed so badly for his SDRL empire.......
Not all unknowns are created equal....!
The questions below would more clearly define NADL investment risk.
There are several other questions not listed...!
Have there been recent lease auctions for the North Sea and have those auctions been
well received by capitalized E&P firms ....?
What is the overall seismic data for "ready to go" North Sea projects..?
Another knowable aspect of HE drilling is current utilization of available rigs designed
for this regions..? Play-Tow states HE rigs are still in "great demand"
What is the quality of the E&P firms who look poised to develop North Sea projects.
(Rosneft & even XOM, as it turns out, were not of good quality)
The answers to these questions, among others, will indicate the likelihood that NADL
will return for investors what was expected back in June or what was expected in August.
Saying future things are out of one's control to discount, from an investment standpoint
is a dangerous investment methodology........
This morning I made relatively healthy additions to my existing PACD position.
I was able to add at the $9.16 and at $ 9.18 per share levels.
I feel these are excellent long term entry points for PACD.
If the Rosneft Kara Sea contracts are not allowed to go forward .....what would NADL fleet update
indicate for the next several quarters of revenues.....?
semi W Venture is open after July 2015
drill-ship W Navigator is open after Dec 2014
semi W Alpha is open after July 2016
semi W Phoenix is open after Oct 2015
semi W Hercules is open after Jan 2018
NADL fleet of HE jack-ups (3) look to be in good shape.........if NADL can cancel the ordered
jack-ups dedicated to Rosneft...... OR lease those new rigs easily to other E&P firms elsewhere.
The above would be a worst case scenario if the Kara Sea projects are closed off to drilling
Therefore the question for investors appears to be......
"how difficult would it be for NADL to find new E&P firms that would sign HE semi & drill-ships drilling
contracts prior to the expiration of the current NADL contracts...??"
If an investor thinks "not too difficult" then NADL stock looks to have overshot on the downside.
On the other hand, if an investors says "might be difficult to replace all of the current contracts
without Rosneft" then NADL stock price could have further to go lower.......
This is just my "rig utilization" way of looking at the challenges ahead for NADL if the sanction
remain in place deep into 2015 .........
Thanks for your reply .....
I am afraid, as I think other investors are, that Jan 2015 is only 3 1/2 months away,
which some/many think may not be enough time for NADL & its clients to return
to its schedules, even if an accord is reached upon the initial cold snap in Europe....
I for one am not so sure that the EU/USA lift their sanction on Russia before next
Spring, as surety for complete winter natural gas delivery completion.
Thanks for your post..
Is Sept 26 the date XOM finishes its current drilling contract with
NADL....? Or are you noting the 26th for a different reason.?
OK, Beef, you pay my all tax liabilities for the next 5 years and I'll buy all your BGS shares for $ 36.00.
Is that a deal....?
I agree with you that NADL operates "very unique assets"......
....however NADL is now facing a "very unique political & operational situation"
NADL near term challenges are significant and unusual. Not easy to discount
their future outcomes as they impact NADL's performance.
The only remaining behemoth crude oil reservoirs are located under the seas ........
if either SDRL or NADL drops their dividend.......watch out, IMO, that would trigger another
huge stock price upheaval for both.