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Vantage Drilling Company Message Board

play_tow 263 posts  |  Last Activity: 12 hours ago Member since: Dec 16, 2004
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  • VLCC up 10% today. There is every reason to believe that spot rates for VLCC will eclipse $100,000 sometime in the next 1-3 months.

    The big hurdle for the share price is the extent of further dilution if they use equity to raise cash for their impending debt re payment. The market may yet bail CEO out on that issue since they could see a major revenue surge over the next 3-6 months.

    -------
    Deutsche Bank initiated coverage on Frontline Ltd. (NYSE: FRO) with a Hold rating and a price target of $2.00.

    Analyst Amit Mehrotra said, "We believe FRO is fundamentally well positioned to benefit from a turn we see coming in the crude tanker market. Unfortunately it appears the recovery can’t come fast enough, with FRO’s upside-down capital structure and impending $190M debt maturity likely necessitating further dilution to equity holders. With more-than-enough upside potential if spot rates rebound, we prefer to be on the sidelines for now until near-term capital structure hurdles are cleared."

    For an analyst ratings summary and ratings history on Frontline Ltd. click here. For more ratings news on Frontline Ltd. click here.

    Shares of Frontline Ltd. closed at $1.56 yesterday.

  • Spot rates over $66,000 today.

    The market strength for spot will soon spill into the T/C segment.....but currently spot rates are double the 1-Yr charter rates.

    CEO indicated in conference call that they will stay in spot, and roll their 4 T/CS coming off hire in Q1 into spot, unless more attractive long term prospects materialize.

  • Reply to

    So OPEC did not cut.

    by audiophul Nov 27, 2014 11:08 AM
    play_tow play_tow Nov 27, 2014 3:48 PM Flag

    If they get past the $150M in near term debt obligation w/o share dilution, then an investor may do well here indeed. But there is so much complexity here, that I've stayed with DHT whose situation is very transparent, and whose share are substantially below NAV. I see DHT at $10 by mid 2015.

    From FRO...

    "The Company’s debt and lease obligation is being worked on. The target is to re-build Frontline into a leading tanker company"

    Don't know what that means for shareholders......

  • Reply to

    So OPEC did not cut.

    by audiophul Nov 27, 2014 11:08 AM
    play_tow play_tow Nov 27, 2014 12:29 PM Flag

    Good news for tankers! DHT has the best leverage to spot in VLCC space, excepting FRO and EURONAV.

    The latter have high break even prices for their VLCC, with Euronav indicating $29,000 day rate, compared to $20,000 NNA. TNP has but 1 VLCC, mainly in Suezies and Afras.

  • Reply to

    Yea Or Nay

    by anal.lyst Nov 26, 2014 10:01 AM
    play_tow play_tow Nov 26, 2014 12:52 PM Flag

    10M barrels/day production will need to be replaced by 2017, given the roughly 4-6% annual decline rates of existing production.

    UDW will be the place for that, and SDLP is the best positioned to capitalize, while having insulated itself from the short term volatility, IMO.

  • Reply to

    SDRL Action Today....No PACD Div in 2015

    by play_tow Nov 26, 2014 10:51 AM
    play_tow play_tow Nov 26, 2014 12:13 PM Flag

    I like the exchange, and differing points of view ....respectfully offered. Thanks.

    I took a position in SDLP today, believing that they stand out among all UDW as having a secure dividend thru mid 2017, which is the first time any of their floaters come off charter.

    I do think that UDW is going to be the go- to location for new production. To be sure, the world is oversupplied today, but with a 3-6% depletion rate annually for world production, even a flat demand growth will require that about 10M barrels/day of new oil production must be brought online by 2017. That won't come from shale, it won't come from OPEC....it will require UDW. By then, there will be a new strong demand cycle for UDW capabilities.

    The current weakness is also leading to a must reduced order book for UDW,and that sets players having modern equipment up very nicely by 2016.

    Of course, today it's a sell in the sector, since no one invest for the long term it appears....

  • Reply to

    SDRL Action Today....No PACD Div in 2015

    by play_tow Nov 26, 2014 10:51 AM
    play_tow play_tow Nov 26, 2014 11:20 AM Flag

    I doubt the div, as intended, will be paid at all. The market conditions have so radically changed in the interim, that it would be prudent to reexamine their thesis for the div initially conceived, which would now be north of 10%.

  • Reply to

    Yea Or Nay

    by anal.lyst Nov 26, 2014 10:01 AM
    play_tow play_tow Nov 26, 2014 11:18 AM Flag

    A buyer at $18.76 this morning is already up 5%!

    Brave? No, just opportunistic.

    Since you seem to lean on cliches----"The time to buy is when there's blood in the streets."

    or the alternate, but equivalent meaning:

    ""You pay a very high price in the stock market for a cheery consensus."

  • SDRL removed their outsized div today.

    I think the PACD board will reconsider the merit of any div for PACD shareholders in 2015.

    Cash and balance sheet are the new focus...

  • Reply to

    3Q Report

    by rogers2308 Nov 26, 2014 9:36 AM
    play_tow play_tow Nov 26, 2014 9:45 AM Flag

    I do believe that this stock is severely misplaced. Yield is 12.5%, no risk thru mid-2017 for contract rehire.

    SDLP is being confused with SDRL and NADL, where divs were eliminated today. That is not going to happen for SDLP....but it takes a bit of dd to figure that out!

  • Reply to

    SDRL Partners Comments on Strong Outlook

    by play_tow Nov 26, 2014 9:32 AM
    play_tow play_tow Nov 26, 2014 9:36 AM Flag

    Get your glasses on:

    "The long term outlook for the floater market is positive, and we believe the current market is a short term dislocation driven by a pullback in spending at a time when a significant number of new rigs are entering service. Over the long run, these rigs will be absorbed as reserves discovered in the deep and ultra-deepwater are developed and major oil companies continue to focus their activity on 6th generation units in a bid to advance the safety and efficiency of the rigs they employ."

  • from their morning release at SDLP:

    _______________
    Market

    Since our last quarterly report in August, the oil price has dropped by 23%, or US$24 per barrel. It remains to be seen how long the current market conditions will persist and during this period short to medium term visibility will be reduced. However, the Company believes the positive long term fundamentals of our industry remain intact. This belief is primarily driven by the fact that the days of easy, low cost oil are over and new offshore reserves required to meet long term demand growth are found in the deep and ultra-deepwater regions. As mentioned by a number of major oil companies, these reserves are well positioned on the cost of supply curve and can be expected to be produced even at today`s oil prices.

    The near term outlook for ultra-deepwater drilling ("UDW") units has become increasingly challenging in light of the macro developments over the course of the last quarter. However, Seadrill Partners remains very well positioned in this environment due to the fleet`s long term contracts. The Company has no UDW rigs up for re-contracting before 2017 and only one semi-tender rig, the West Vencedor, up for re-contracting before then, for which management remain confident an extension will be agreed.

    It is encouraging to see the industry rationalizing older fleets with increased stacking and scrapping activity. Roughly 45% of the current floater fleet is 15 years or older and 30% of the fleet is 30 years or older. We expect stacking and scrapping activity to accelerate as 2015 progresses and lead to a more balanced supply picture by the time Seadrill Partners will be re-contracting its units in 2017.

    The long term outlook for the floater market is positive, and we believe the current market is a short term dislocation driven by a pullback in spending at a time when a significant number of new rigs are entering service. Over the long run, these rigs will be absorbed as reserves discovered in the deep and ultra-deepwater are developed and major oil companies continue to focus their activity on 6th generation units in a bid to advance the safety and efficiency of the rigs they employ.

    Seadrill Partners continues to be in the best possible competitive position with long term contracts, robust backlog and little exposure to the near term dayrate environment.

  • Reply to

    Div cut unlikely

    by goat_frank Nov 25, 2014 9:05 AM
    play_tow play_tow Nov 25, 2014 8:06 PM Flag

    Easy...when the drop in share price anticipates a downward turn to a company's future business prospects.

    The DIV is a lagging indicator of those prospects, while the share price is a leading indicator.

  • play_tow play_tow Nov 25, 2014 3:24 PM Flag

    The shares are discounting Q4, I believe. The issue is the sustainability of earnings in this space, and the risks related with the volatility in the oil prices.

  • IF OPEC cuts, say 1M brl/day, the impact on tanker space would be negative, if history is an indicator.

    But is history an indicator, in this case since global demand is still growing, and tanker supply is constrained?

    The shares of tankers have been weak, I believe, because of the pending OPEC decision.

  • IF OPEC cuts, say 1M brl/day, the impact on tanker space would be negative, if history is an indicator.

    But is history an indicator, in this case since global demand is still growing, and tanker supply is constrained?

    The shares of tankers have been weak, I believe, because of the pending OPEC decision.

  • Reply to

    So quite here

    by moretreelessbush Nov 24, 2014 3:21 AM
    play_tow play_tow Nov 24, 2014 10:33 AM Flag

    Agree. Contracts firm thru late 2017. By then, the prospects will be better for UDW rigs than they are today.

    In the meantime, they will pay 11%, with no risk of a div cut given the nature of the long term nature of their contracts.

  • play_tow play_tow Nov 21, 2014 8:43 PM Flag

    Don't underestimate the VALEMax effect, with China now agreeing with VALE to dock those very large ore carriers. Coal demand is also important for Cape demand, and that is weak. Steel demand is weak...though as you suggest, still at a high level. Orderbook is 20% for Capes, and that is not excessive....but it's still not a picture that screams fora much better supply-demand dynamics going forward.

  • play_tow play_tow Nov 21, 2014 8:39 PM Flag

    Way too optimistic. First, share count is soaring, so EPS will not grow as you state. Second, orderbook is 20+ %, Coal trade to China is weak, and steel demand is weakening. Cape rates will nit sustain a high level. But then they don't need to.....$25,000/day would be very lucrative. Unfortunately,FFAs are only at about $15,000 to 2016..... Not much long term optimism.

  • Reply to

    Dividend Raise and 3rd Quarter results.

    by g_hennington Nov 21, 2014 11:34 AM
    play_tow play_tow Nov 21, 2014 2:23 PM Flag

    The quarterly DIV was increase from 0.05 to 0.06/share. That is a 20% raise in the quarterly dividend. Current yield is therefore about 3.3%

VTG
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