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Genworth Financial, Inc. Message Board

matthsusant 18 posts  |  Last Activity: Mar 13, 2015 7:34 PM Member since: Oct 24, 2007
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  • Reply to

    Offshore drilling News

    by hjeffer846x Feb 5, 2015 5:09 PM
    matthsusant matthsusant Mar 13, 2015 7:34 PM Flag

    It's also curious that the Rigel and Alpha work for Rosneft is still in the backlog (for NADL at least). That can be read a lot of different ways. The most likely is that they'll remove those once termination notices are received. Also possible but less likely is that closing of the original deal is extended to beyond the oil-related sanction expiration date.

  • Reply to

    Offshore drilling News

    by hjeffer846x Feb 5, 2015 5:09 PM
    matthsusant matthsusant Mar 13, 2015 6:43 PM Flag

    Hjeffer, i can't imagine that JF would prefer bk here over reconsolidation in some form. Given that SDRL owns 70% or so of the shares and guarantees the debt, and could acquire using SDRL shares alone v. cash, there is almost no incentive to give any portion up to non-sdrl creditors. The question is how minority shareholders would be treated. It would bear some research into whether SDRL could do a short form merger under bermuda law, or if they will have to do a tender.

  • Reply to

    Offshore drilling News

    by hjeffer846x Feb 5, 2015 5:09 PM
    matthsusant matthsusant Mar 13, 2015 6:12 PM Flag

    The Rosneft backlog had already been removed from seadrill's report, so no surprise here. The whole Rosneft deal will probably fall through. Recently seadrill stated that the rosneft deal would be all-or-nothing, which seems to indicate that they can't rework the contract due to the EU sanctions (i.e. only the original contract was grandfathered, and any modifications would likely not be). Or, maybe it just indicates that JF didn't want to lower the price to work with them. Either way, Rigel will also be looking for work.

    The spec sheet for the Rigel emphasizes design for use in both benign and harsh environments, so i assume it will be marketed across seadrill's organization.

    Regarding other work with Rosneft, any deals made until sanctions are lifted would have to be non-Arctic shallow water HE drilling. Not the thing for drillships or semi-submersibles. It is highly unlikely that the oil sanctions will be continued in July, so new conversations with Rosneft could begin then, but oil price will be a factor there as well.

    One big question is whether we see reconsolidation with SDRL, or if NADL will be kept separate. It seems the IPO was done at least in part to allow Rosneft to buy into the company. With the deal on ice, is there any reason not to reconsolidate NADL?

  • Reply to

    anyone listen to the cc?

    by malboeuf1 Feb 26, 2015 10:05 PM
    matthsusant matthsusant Feb 27, 2015 2:06 PM Flag

    You can get all of the best information in the con call by replaying the last five minutes, where the one analyst that called in asked his questions. The rest of the call tracks the powerpoint.

    Based upon answers to the analyst's questions, they are negotiating an extension with Total for the Phoenix, but that probably won't be done until close to that contract's expiration. They said that they'd certainly be willing to do an extension with on the Venture, but it didn't sound like one was in the works. Thus, i'm anticipating the Phoenix to continue work at a somewhat lower rate, and the Venture to go off contract, based upon current public info. I'll be very surprised to see the Rosneft deal close in May, but not surprised to see it happen later in the year, as i anticipate the EU oil sanctions to expire in July unless Ukraine really heats up again close to the deadline. Keep in mind that the Rosneft deal is within the grandfather clauses of the EU/Norway/Bermuda sanctions, so there is probably a convoluted path forward from a legal standpoint, but current politics probably trump the legalities.

  • Reply to

    I expect to go back up after open.

    by appleshortsareimbeciles Feb 26, 2015 9:18 AM
    matthsusant matthsusant Feb 26, 2015 4:53 PM Flag

    Finally listened to the con call. Very few analyst questions. There's not much interest in this company right now.

    Management seemed to have some confidence that they'd reach an extension agreement with Total re the West Phoenix, though mentioned that Total are "good negotiators," so we can probably anticipate a day rate drop. Didn't seem to have the same confidence about the West Venture. They were pretty quiet on Rosneft - they are still treating it as if it is going forward. Not much color was given on the Rosneft situation - it just sounds like both companies are biding the time until the sanctions are cleared.

  • Reply to

    Hope for best

    by apax0260 Feb 25, 2015 6:34 PM
    matthsusant matthsusant Feb 26, 2015 11:58 AM Flag

    I thought we'd be down more than 5% too. This makes me believe that the downside risk is low given the present facts, and that any contracts they manage to secure for the at-risk floaters will provide reasonable upside. I'm sure it will be slow progress, but i did find the following quote from Odfjell re HE rigs interesting (from Offshore Energy Today):

    “Scrapping and cold-stacking of older units will pick up speed but despite this, we expect the deep- and ultra deepwater market to be oversupplied for a period going forward. We believe the harsh environment market to be relatively more in balance for modern assets, but also here we expect a drop in utilization. “

  • Here's an excerpt. The whole article is worth reading.

    (Bloomberg) -- U.S. and European suppliers to the oil industry are still able to seek work in Russia’s Arctic despite sanctions designed to limit their involvement because the rules don’t apply to foreign subsidiaries.
    Schlumberger Ltd., based in Houston and the world’s largest oil services company, and Baker Hughes Inc. have used units based outside the U.S. to bid for business in Russia’s Arctic, according to a Russian government website. Offshore projects in the Arctic are among those targeted by U.S. and European sanctions against Russia’s oil industry.
    There’s no allegation either company broke the rules and none of the bids was successful. Nonetheless, the use of subsidiaries to legally skirt sanctions will raise questions about the effectiveness of measures imposed to punish Russia by limiting Western involvement in its most important industry.
    Schlumberger’s Russian unit bid in a December tender to supply drilling fluids to an offshore Arctic project operated by OAO Gazprom Neft, the oil unit of Russia’s state-run gas exporter, according to government documents. In November, Houston-based Baker Hughes’s local unit and a Panamanian unit of Schlumberger had offered drilling services at the same field.
    That’s possible because international subsidiaries aren’t subject to sanctions, Alexander Bychkov, a partner at the Moscow office of law firm Baker & McKenzie LLP, said in an e-mail, addressing the topic generally . . . .

  • matthsusant by matthsusant Feb 13, 2015 12:49 PM Flag

    For what it's worth (from the Barents Observer):

    Norwegians John Fredriksen – President of Seadrill, and board member of the same company Tor Olav Trøim, have been awarded with the medal, along with representatives from the company Schlumberger.

    The businesspeople are awarded the Order of Friendship for their “substantial contribution in the organization and implementation of drilling works at the Universitetskaya-1 prospective in the Kara Sea, which lead to the opening of the Pobeda field”, Arctic Info writes.

    President Putin also expressed his gratitude for participation in the drilling operations to 29 employees of different foreign companies – rig superintendents, drillers, engineers etc from Halliburton, North Atlantic Drilling, Schlumberger and ExxonMobil.

    The University-1 well in the Kara Sea holds 128,7 million tons of first-class oil and 391,9 billion cubic meters of gas. The well was drilled by Seadrill’s rig “West Alpha”, with drilling operations ending on October 10 2014, only one week before new western sanctions targeting the Russian oil industry came into force.

  • Reply to

    Offshore drilling News

    by hjeffer846x Feb 5, 2015 5:09 PM
    matthsusant matthsusant Feb 9, 2015 7:22 PM Flag

    Yes, i read that one too. My reading list has greatly expanded since investing in this company - offshoreenergytoday, offshore-mag, barentsobserver, kyivpost, itar-tass, themoscowtimes, libyaherald, arcticjournal, and some others. Regarding today's action, i didn't expect it to come this soon either, but you never can tell when these rallies are going to happen. Sometimes they get legs and keep going. I don't have high hopes for this one to run any farther, but you never know.

  • Reply to

    Offshore drilling News

    by hjeffer846x Feb 5, 2015 5:09 PM
    matthsusant matthsusant Feb 9, 2015 2:05 PM Flag

    Hjeffer - there has been a fair amount of positive news in the last week or two regarding harsh environment exploration prospects. Although Statoil is cutting capex back, they are focusing their efforts on the Norwegian shelf and north sea, which will require rigs for those conditions. Also, Lundin is moving forward on its harsh environment exploration plans. Further, Rosneft said last week that they were going to invest around $500 billion in arctic exploration in the next 20-25 years. So, there will be demand for NADL's rigs.

    Gotta love days like this.

  • Reply to

    New says no drilling not no deal right?

    by jmjava Jan 30, 2015 4:48 PM
    matthsusant matthsusant Jan 30, 2015 4:56 PM Flag

    From the latest Reuters update:

    The first source said roughly a year and a half was needed to adjust the Kara Sea project for a new platform so in order to start drilling in July-August next year, Rosneft would need to start looking for a platform now.

    "We expect to decide on the platform by April-May and will launch the tender soon. The choice is obvious -- there are a lot of platforms in the East, in China or South Korea, maybe from North Atlantic Drilling, maybe from Lukoil (LKOH.MM) in the Baltics," he said.

    "There are a lot of platforms and this is not a problem even if it is not an ice-proof -- it can always be upgraded ... After oil prices have fallen it is two-times cheaper to lease platforms and supply vessels."

  • Reply to

    Russian deal officially done

    by oropan45 Jan 30, 2015 8:15 AM
    matthsusant matthsusant Jan 30, 2015 1:59 PM Flag

    Yes - the US sanctions will probably be in place until Putin exits Ukraine and stops supporting the rebels, and Putin is not going to exit willingly unless he achieves his goals, leaves office, or just can't finance it anymore.

    The old US sanctions had work-arounds, but the December "us or them" sanctions are too risky for companies with important US business. Obama hasn't applied them yet, but he could if Russia stays in Ukraine. That threat will keep any deal from happening until the risk from those sanctions is gone. NADL doesn't want to risk its Exxon contract.

  • Reply to

    Russian deal officially done

    by oropan45 Jan 30, 2015 8:15 AM
    matthsusant matthsusant Jan 30, 2015 1:23 PM Flag

    Deadairez - I now agree with you on your Russia comment - the business environment there is horrible and getting worse.

    That said, there is not enough info in the article to claim the deal is dead - the extended EU sanctions are the ones on the oligarchs' travel and finances, and the grandfather clause of the oil technology sanctions wasn't removed. U.S. sanctions prevent the west alpha from being used, so no surprise it won't be used this summer. Rosneft still badly wants to drill but needs rigs, so they will still want the NADL rigs.

    I do think the deal is less likely to go forward in May, barring a huge change of events in Ukraine, because the US sanctions passed in December but not yet applied increase the risk of cooperating with Russia - if the U.S. sanctions were applied while NADL was working for both Exxon and Rosneft, they'd have to break one of the relationships.

    On the flip side, JF did make oil shipments during the Iraq/Iran war, so he doesn't shy from risky situations, and the Rosneft work could keep them busy for years. So it's still up in the air.

    The best thing for near-term would be an announcement of deals for the venture or phoneix, which aren't impacted directly by Rosneft.

  • matthsusant matthsusant Jan 6, 2015 7:59 PM Flag

    Bravo! to yahoo's filters for picking up and sanitizing my foul language yet again.

  • matthsusant matthsusant Jan 6, 2015 7:56 PM Flag

    That wasn't even a bad word! Crazy that the filters took that one out. #$%$ is the anagram (let's see if spaces and dashes can outsmart the filter). Incidentially, RCAP has the same anagram. Probably an accurate statement of things for both companies when Schorsch was in charge. Good luck to you too.

  • matthsusant matthsusant Jan 6, 2015 6:41 PM Flag

    Good job on JCP. GNW was quite good (I got out at $17.50) We may get another bite at GNW with the LTC reserve issues, but look out for US MI - the last oil bust was hard on MI companies. I got a nice bump over the last few months with ARCP (love that it is an anagram of #$%$).

  • matthsusant matthsusant Jan 6, 2015 2:29 PM Flag

    From an International Business Times article about an interview with Alexi Kudrin in late November 2014:

    He urged the Kremlin to look at rebalancing the Russian economy away from its dependence on oil and gas exports to the West, looking to new resources in the Arctic and Far East. He also warned the process may be hampered by a Western ban on the import of hi-tech energy equipment.

    Kudrin said Russia should pursue a relationship with China but not at the expense of the West, upon which it relies for innovative technology.

    He said: "We could make a mistake if we only see a Chinese [policy] vector. We need to understand that for at least 20 to 30 years, we will continue to receive basic technologies from the West."

  • matthsusant matthsusant Jan 6, 2015 12:09 PM Flag

    The low oil prices are also having the effect of pushing the Ukraine peace process forward, albeit slowly and probably against a lot of people's wills. News keeps surfacing about Ukraine, Donastk/Luhansk, Russian, French and German ministers having various meetings to try to implement the Minsk Protocols. Today there was news about Ukraine offering its released prisoners amnesty, which was one of the points of contention.

    Also, Russia/Rosneft shows no sign of backing off on its Arctic plans - the recent deal with Finmeccanica for the helicopters announced Dec. 31 was stated to be for arctic development. Sechin stated ”Offshore projects development is a strategic priority for Rosneft. It is impossible to accomplish this mission without state-of-the-art arctic and marine equipment, oil and gas rigs, modern aeronautical engineering. We are glad to reach these agreements, thanks to which strategic cooperation in such an important area is being created”.

    So, the question is whether the rigs referred to will come from NADL. At least some influential people in Russia recognize that they need western technology to accomplish these goals - Alexei Kudrin recognized this in an interview in December, and also recognized the strategic importance of arctic oil.

    The EU is losing its taste for sanctions - it appears that France and Italy won't approve additional sanctions, so the current ones will likely lapse by summer if not withdrawn earlier. Plus, NADL may get approval earlier due to being grandfathered in. US sanctions are the question - NADL has no operating subsidiaries in the US, but they do use US equipment and suppliers from what i can tell. Given the drop in oil and oil company capex, there is a strong incentive to overcome this issue.

    The Rosneft factor is unique to NADL/SDRL compared to other drillers, and is very much in play.

GNW
7.29-0.01(-0.14%)Mar 27 4:01 PMEDT