One more on this and then I'll shut up. I made an incomplete point and need to clarify: I wouldn't buy stock in an individual Russian company in this environment... the political unknowns here are huge. The move here IMO would be to buy a fund although personally I have not, and I'm not sure of the % allocation.
j0n - That's why I would probably do this through a fund and spread the money around. The political risk here is huge and obviously would not be worth having a portfolio of 100% in Eastern Europe JMHO. And this plus 5 bucks will get you a cup of coffee at Starbucks.
I don't want to run this place over with Russia talk but yeah, TRF is just a Templeton closed-end fund. Slightly higher Russia exposure in TRF, but T Rowe Price fund is 27% Turkey. TRF is only 2% Turkey. Just FWIW... It's an intriguing idea because the last seller is gone. Yes, there is political risk, but from an investor psychology standpoint, the last seller said "Get me out here" months ago.
It's an intriguing idea and totally agree on the sentiment... easy to be negative which is why it's probably an opportunity. What % are you in Russian stocks and would you or have you considered something like TRF to spread it around a little bit?
A rising rate environment would help more. Right now rates are going through the floor. It's something you get through eventually but just how long is an "eventually"? The discount to book makes it attractive at the moment, but not much else IMO.
If oil gets back up to 80-90 and stabilizes, they probably both got a good deal. If oil only gets back up to 70-ish, not so much.
The key is to make sure those sparkling rigs don't get taken away, so you need to pay attention to those current assets. My blunder aside, yes or no, did the customer get a good deal?
And you do understand that the customer makes out here, correct? Okay, sure, every little bit helps when distressed (4 billion worth of debt vs. 1 billion assets and a 1.2 billion market cap is not healthy in this environment). This is not the deal ORIG would have gotten 6 months ago... they would have done a lot better. Again, if oil prices recover, the day rate could kick up - good for ORIG. But the customer got a good deal here.
Reading the details of that contract ENI got a day rate modification... and I don't think it was in the upward direction. Yes, the rig will be working, but the lower day rates will not increase earnings.
"As part of the contract extension for the Ocean Rig Poseidon, Ocean Rig has agreed to adjust the existing dayrate of the Ocean Rig Poseidon contract in exchange for ENI agreeing to enter into two contracts (the "New ENI Contracts") for the employment of one or more of Ocean Rig's available drillships in West Africa starting in the first quarter of 2015 for an aggregate period of approximately 8 months."
I found this statement interesting as well.
"2) The backlog calculation of the Ocean Rig Poseidon includes the contract extension and the rate adjustments which remains subject to various conditions including approval from national authorities. It does not include any potential upside on the dayrate which is linked to the oil price."
An interesting contract that gives ORIG a chance to participate in the recovery of oil prices.
I do. Now let's see if you do. Have you owned Sdrl and line/lnco over the past 4-5 months? What was your % loss on Sdrl? You then SWITCHED OUT to line/llnco. So... What is your % loss on line/lnco? We all make mistakes. You can go ahead and admit them. My point is there's no need for you to be so brash about this when you've had the losses you've had. You're just lashing out because someone actually kept track of this wonderful "advice" you are dispensing. Ugh...
I dont' own either. Sold SDRL back in the mid 30's. Ha, but I made up for it by owning some PWE. We all make mistakes and there isn't an energy stock that hasn't lost money, period. I just don't like when someone comes on here after SDRL has lost 50+% (and he participated in those loses), then said "No, switch to LNCO or LINE" back in late Oct/early Nov and belittles people for not doing it, LINE/LNCO then proceeds to lose another 50+% over the next two months, but then he has the audacity to come on the board today and tell people how they should have switched out of SDRL and into LINE/LNCO. THAT'S pathetic! You lost 50% on SDRL, then lost another 50% on LINE/LNCO. Sounds like about a 75% loss in total. And then come here and tell people what they should have done? I'll pass.
Nov 1 - LNCO 24.05
But you did get 50 cents worth of dividends... LOL.
With returns like that, you'll be broke in no time.
I think SA is getting exactly what they want. They want uncertainty in the oil markets and they're getting it. Uncertainty slows down or stops development plans. There will be unintended consequences though - I think you're dead on there. But SA is getting what want they want.
You also said to drop SDRL and buy LINE/LNCO in November. That would have gotten investors a double-whammy as they would have participated in a major drop in both stocks. Next...
It's a good question. This is not a ridiculous amount of oversupply... at least not enough to warrant a 50+% drop in the price of oil. SA needs to be careful because the more they talk this down, the bigger the price spike is going to be the other way and if it spikes enough, you create another recession. I can't figure out the impact on UDW. SA has managed to create a lot of uncertainty over oil price and enough IMO for longer term projects (which UDW is) to get shelved. Due to higher depletion rates and shorter well lives, shale has the upper hand right now in my opinion. Oil drops, they just don't drill. Oil spikes, they produce more. UDW requires years of commitment. I think the question is, we've had the drop, the spike is coming, so where does oil settle after the dust settles? That will tell you SDRL's future. Due to price uncertainty and timelines, I think these UDW guys will be slower to recover.
I think it's a good time to be holding some cash and nothing wrong with being a little cautious. My crystal ball isn't as clear as yours.
And when I say, " The amount of shares represented is a a fraction of a percent (ie, no big deal)", I'm talking about the amount of shares owned by people who take a look at this board is a fraction of a percent. If everyone sold based on these idiotic posts (to include the spam posts - who listens to what they have to say?), I can't even think it would register a blip on a trading screen.