stop posting such nonsense - its not savings if it comes from future dividends. You should worry about cash flow and earnings in future. All the analyst estimates were based on $100 Oil, now that $50 is in sight - what will earnings look like.
but much larger capex is required for UDW oil as compared to Shale. If Oil stays at this level, all new drilling/exploration will stop. As production declines, prices rise - a new cycle will begin... for now, its the worst sector to invest in.
I think buying before Jan/Feb 2015 is madness. If anything, buy a very small position so its on your radar.
This stock is not going anywhere quick but down for now. I hope the company is not foolish to start buyback here. They need to wait for Oil to bottom. It tested $60 today. It may very well break and test $50 early next year...
I am sure at some point many miners (and not just juniors) will go belly up or, start fire sale.
I have noticed that when a sizable physical seller comes, Gold crashes (see Ukraine in Nov and Gold at 1130) - now just imagine if Venezuela or, Russia start selling... ouch!
There is no stopping Oil testing $50 and Gold testing $1000
Just look at other commodities like copper, iron-ore etc. Don't expect a bounce any time soon on any drillers for a long time.
some courageous buyer took out my stop loss order at 1.47. I guess congratulations are in order for your astute buy. I hope you have saved enough to buy Tums, Pepcid or whatever your choice of Antacid is. I had paired my MM long position with FUEL short position and thanks to your courageous action, I am now closing my FUEL short position at all time low. I have broken even on my trade. I wish you luck with your MM position.
its not a nice short here - other than day trades. It was a nice short in 30s but have at it...
its not clear that they are actually diluting shares - they have 186K in treasury, they may be using from that pile. Though it is curious to what extent they are desperate to preserve cash.
You can forget about buyback happening any time soon...
of course they can't and I am not implying that Saudi can meet current worldwide demand. I am just stating that the current trend is lower oil. If there is another recession (and commodity data points to that) we could have the perfect storm where at least for a short term oil trades much lower. Usual panic will grip the market and SDRL will trade much lower.
I also believe that if $80 level can be regained, SDRL will trade back to high teens or, even 20+. But removing 1-2 Million/Day supply without OPEC cooperation will not be easy.
How will SDRL trade if Crude breaks $50 and trades back at 2008 lows - its looking like a real possibility. There is no reason for Crude to trade at this level if the cost of Saudi Production is less than $10.
They could have slashed the dividend by 75% and still maintain a 5% yield on a $20 stock. I think the market had already priced that in and the stock would have stabilized at that level. If they were confident of keeping $4 dividend through end of 2015. They could have committed to a $1 dividend through 2018 and the stock price would have been fine as I don't think many funds would have dumped at this rate. But going to 0 has caused a panic. Who would want to hold on to worthless common if it doesn't have any yield. The rotation from yield investor to value investor is a grind.
I hope SDRL has more sense than buying back its worthless common at these prices. They should wait for a clear sign that Oil has bottomed and in the mean time reduce debt as much as possible.
I hope folks are not making the mistake of buying SDRL for the wrong reasons - the common stock is trash, please do yourself a favor and buy SDLP if you want exposure or, a better run company like RIG or, SLB.
Crude is up over 4% today - DO, RIG etc. are outperforming SDRL for a reason.
The general logic of "all bad news is priced in" time to buy - does not apply here. The market is screaming SELL for a reason - there is more bad news to come. Look at downward earnings revision - day rates are deteriorating all around. Junk bond rates are climbing - all these are terrible signs.
technically not true as the dividend would have been increased as share count shrunk with buybacks - so more like 2.5 years but who's counting... I am now thinking that maybe SDRL is going straight to zero... a company does not "suspend" dividend overnight without some serious loss of street confidence. This buyback talk is rubbish as you will have to wait 3 months to find out if any buyback has actually happened.
buying 10% is not meaningful support especially when 50% or more income investors are trying to get out and new shorter horizon weaker "value" buyers are stepping up.
Analysts tried to pin management on price level considered attractive for buyback but that was met with silence...
Also, death cross on weekly charts -