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SeaDrill Limited Message Board

play_tow 239 posts  |  Last Activity: 16 minutes ago Member since: Dec 16, 2004
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  • Reply to

    Single Digits....

    by play_tow Sep 29, 2014 10:14 AM
    play_tow play_tow 16 minutes ago Flag

    This is the issue.....at what price are their P1 and P2 reserves,the growth of which the CEO always touts as the companies strength, economically recoverable?

    Its impossible to know give the lack of appreciable recovery, to date. Lots of promises, but as you write, the decline rate----in the face of huge capital expense---is telling a more bleak story.

    There is a reason why the oil majors sold off these assets!

  • play_tow by play_tow Sep 29, 2014 10:14 AM Flag

    Reports over the weekend from sector analysts see Brent trading below $90 in 2015.....LLS and WTI will be lower yet.....EXXI is not profitable if oil drops to those levels, and below.

  • According to information in the DRYS site, and consistent with fixtures during the last several weeks, the 1-3 rates for Capes exceed $21,000/day

    1 year

    20750/day

    2 years

    21750/day

    3 years

    21250/day

  • play_tow play_tow Sep 26, 2014 11:31 AM Flag

    At $25,000/day....VLCCF would be able (by my simple math in a prior msg) have capacity to payout $1.50/sh div or so, assuming 111M shares outstanding.

  • play_tow play_tow Sep 26, 2014 10:05 AM Flag

    should of known you were pulling my leg...

    Today's deal involving China's CMES to order 10 VLOCs for Vale indicates that they are looking to support the import of cheaper ore, at the expense of their local mines which simply can't compete.

    The Govt of China may very well provide some near term support for the miners, but given the environmental issue involved with ore extraction, the resources required, I would think that their "stated" goal to develop their economy in a more sustainable fashion will lead to the ultimate shuddering of those local sources.

  • That's just the volume. The greatest growth is expected from Brazil, which would mean that the ton mile growth will be in excess of 50% over the next 5 Yrs.

    ---------
    in Commodity News 26/09/2014

    After attempting a comeback of sorts last week iron ore prices have come under pressure again this week.
    Benchmark Northern China 62% Fe imports tracked by The Steel Index on Tuesday exchanged hands for $79.40 a tonne on Wednesday, the lowest price for the steelmaking raw material since September 7, 2009.
    The price of seaborne iron ore has declined more than 40% this year as continuing worries about the Chinese economy and the flood of new supply dampen enthusiasm for the commodity.
    However, estimates released Wednesday by the Australian government suggest growth in iron ore trading remains robust.
    The country’s commodity forecaster, the Bureau of Resource and Energy Economics, says the global iron ore trade will expand to 1.33 billion tonnes this year, an 8.4% jump.
    The pace will moderate somewhat next year to 4.2% growth to 1.38 billion tonnes. Over the next five years world trade in the steelmaking raw materials is projected to increase at an average annual rate of 2.9% to reach a total of 1.6 billion tonnes in 2019.
    China will keep its dominance as top importer. This year the country’s imports will reach a a record 875 million tonnes, up 7% on 2013 (stockpiles have also grown rapidly however, hitting a record 106 million tonnes in June).
    In 2015 China’s iron ore imports are forecast to increase a further 6.6% to total 933 million tonnes and continue growing at 4.7% annual pace to reach 1.12 billion tonnes in 2019.
    Top exporting countries Brazil and Australia are expected to increase their share of the global trade at the expense of Ukraine, South Africa and Iran, while India is likely staying on the sidelines with just 21 million tonnes of net exports by 2019.
    Over the next five years Australia’s iron ore exports are projected to increase at an average annual rate of 5% and total 900 million tonnes in 2019.
    After lagging in recent years, growth in exports from Brazil will outpace that of Australia. Number one iron ore miner Vale’s home base will expand exports at an annual rate of 6% reaching 489 million tonnes in 2019.
    Export growth is expected to come from expansions to existing mines and the completion of Vale’s 90 million tonne capacity Serra Sul mine in the Carajas region. Vale expects the development of its Serra Sul mine along with increased use of the Valemax bulk freighter to double its shipments to China in the next five years.
    Source: Mining
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  • play_tow play_tow Sep 25, 2014 10:57 PM Flag

    The thesis isn't built on an increase in steel production, but on an increase in seaborne ore trade, much of the increase in which replaces shuttered Chinese ore mines.

  • Atleast 10% growth next yr....will alone stretch the Cape fleet capacity including full delivery of Newbuild, and assuming no scrapping.

    Vale sees 50% increase in exports to China over next 4yrs.

    It may not seem evident based on VLCCF price now, but this ship is about to turn....

    -----------
    Vale Sees China Iron Ore Imports Rising to Absorb Seaborne Glut
    in Dry Bulk Market,Freight News 26/09/2014

    China, the world’s biggest buyer of iron ore, will soak up excess global seaborne supplies of the steel-making material as it sustains demand even amid an economic downturn, according to Vale SA. (VALE5)
    China’s ore imports in 2015 will rise further from a record 900 million metric tons this year, Claudio Alves, global director of marketing and sales at the Rio de Janeiro-based company, said in an interview. The country will consume most of the 80 million to 100 million tons of supply that miners around the world may add to the seaborne trade next year, he said.
    The prospect of rising imports highlights China’s demand for steel at a time of slower economic expansion. Vale, along with other major producers including BHP Billiton Ltd. (BHP), Rio Tinto Group and Fortescue Metals Group Ltd., have invested billions of dollars to expand output, betting on sustained growth from the country.
    “Demand in China will continue to be healthy,” Alves said yesterday in Dalian, a major port city in the country’s northeast. “China still has a long way to go in terms of urbanization. It can last another 10 years before reaching a peak.”
    The country’s crude steel production may rise to a record 820 million tons this year, from 779 million tons in 2013, he said. Output will increase 3 percent next year, he added.
    As developed mining projects brought about 140 million tons of additional seaborne supply onto the market this year, prices for ore with 62 percent content delivered to the port of Qingdao in China slumped 41 percent to $79.90 a dry ton, according to Metal Bulletin Ltd.
    Global Surplus
    The global surplus will more than triple to 163 million tons in 2015 from 52 million tons this year, Goldman Sachs Group Inc. said in a Sept. 10 report. The glut will grow to 245 million tons in 2016, 295 million tons in 2017 and 334 million tons in 2018. The government commodity forecaster in Australia, the world’s largest producer, this week cut its price forecast for supplies from the country to $94 a ton this year amid surging production.
    In the short-term, prices may be firmer over the next three months and climb to as much as $100 by the end of the year if record high inventories at Chinese ports can be whittled down by mills restocking before winter, Alves said.
    Some Chinese steel traders with heavy debt are struggling to repay it. China is said to have removed Sinosteel Corp. President Jia Baojun from his post, according to people familiar with the situation, after the state-owned steel trader said it’s facing financial difficulties. A steel-trading unit of China’s Anhui Wanjiang Logistics Group has defaulted on loans, according to an exchange filing Sept. 23. The company cited banks’ unwillingness to extend loans to the steel industry as the reason for the nonpayment.
    Turbulent Period
    “This is a very turbulent period,” Alves said. “But if you look at the Chinese mills right now, they are enjoying better margins now than they were at the beginning of this year. So the problem will be limited to those traders, especially those with high leverage.”
    China imported 74.9 million tons of iron ore in August, down 9 percent from July, as steel mills reduced raw material stockpiles and operating rates, according to official customs data. Total iron ore imports are up about 17 percent this year.
    Vale is on course to raise its production to about 450 million tons in 2018 from about 300 million tons last year, Alves said. The company’s average production cost in Brazil is about $22 a ton, which could fall to $18 after mine expansions, he said. The company may trim as much as $6 off transportation costs to China if its ports allow very large ore carriers to berth, he said.
    Source: Bloomberg
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  • play_tow by play_tow Sep 25, 2014 7:50 PM Flag

    EXXI stock is being caught in the downdraft of all commodities related names.

    EXXI has bigger concerns, however.

    US oil boom continues, with EIA indicating 9.5M barrels per day last month. Expectation is for US to be worlds largest producer next year. It's is expected, by some not all, that without US oil exports, the WTI will drop perhaps as much as 30% below Brent by 2015. That would put EXXi in big hurt, given its high cost, and a break even level above $90/barrel. Hedging can protect a bit, but that won't stop the shares from dropping much further.

  • Reply to

    SALT.....50% off IPO Price

    by play_tow Sep 25, 2014 2:17 PM
    play_tow play_tow Sep 25, 2014 3:46 PM Flag

    Times have changed. We agree (and perhaps too many other also agreed...) that the seaborne ore imports to China, with the low price forcing a large scale (but not total) shut-in of Chinese ore, are going to soar. I think the short term traders are bailing too soon. Once the ore market removes the remaining supply of previously mined ore from the docks, and Brazil gets its output increased over the next 1-4 months, the Capes will respond. The 20% order book in Capes comes nowhere close to accommodating the likely huge % rise in seaborne ore trade, not to mention the increased hauling distance from Brazil. Widening of the Panama Canal to carry Cape sized vessels will also increase Cape related hauls from Brazil.....beginning in less than 2 yrs.

    VLCCF is the best bet (my only one) for this play. I also believe that their div policy will be such (as FRO was many yrs ago) as to return lots of cash to shareholders.

    Now if they could only start make some cash.....

  • Reply to

    SALT.....50% off IPO Price

    by play_tow Sep 25, 2014 2:17 PM
    play_tow play_tow Sep 25, 2014 2:56 PM Flag

    Canaccord apparently came out today with a strong affirmation (not yet another one?!) that Brazil ore exports will create a surge in Q4 Cape rates, as in 2013 winter.

    I still lean toward that view, have held my shares in VLCCF, and should probably add here....

  • With hardly a single of its ~90 new builds yet delivered, the Street is already giving up on the shares.

    Will some of their order book not be delivered?

    Surely, if they were thinking of issuing shares to pay some fraction, that opportunity is now gone.

  • play_tow by play_tow Sep 25, 2014 2:09 PM Flag

    New 52-wk low.....7% yield.

    No more need for refined product transport, I guess....

  • Home / Shipping News / Shipbuilding News / Newbuild orders will delay dry bulk recovery, owners say right time to buy
    Newbuild orders will delay dry bulk recovery, owners say right time to buy
    in Shipbuilding News 25/09/2014

    More newbuilding orders will delay a recovery in the dry bulk market an analyst warns, however, shipowners at the Marine Money Asia conference say it is the right time to buy.
    Banchero Costa head of research Ralph Leszczynski noted that newbuilding deliveries were 20% down on the same period last year and this trend would continue going forward. “Deliveries are going down month by month.”
    The capesize fleet is expected to grow by just 5% this year compared to 19% in 2010.
    However, demolition volumes are also down with 37 less ships scrapped so far this year compared to the same period in 2013.
    “Things are clearly improving, but it doesn’t help if people order more ships,” he said. “We still have to work away the excess capacity, the more we order the longer time this will take. So scrap more, order less.”
    While Leszczynski warned owners not order more ships, when asked shipowners on the same panel said it was the right time to buy, although in some cases secondhand tonnage rather than ordering newbuilds.
    Sypros Capralos, chairman of Star Bulk Carriers said, “Right now it’s a low entry point.” He added they would be looking for vessels including distressed assets.
    Erasmus Shipinvest ceo John Su said they would be buyers in maybe two months time with a preference towards 10-year old panamaxes. Mercator Lines (Singapore) managing director and ceo Shalabh Mittal also said they would look at buying with panamaxes and ultramaxes preferred.
    Sitting on the fence was BergeBulk ceo James Marshall who said they were “neither a buyer or a seller”.
    “We bought a lot of ships. I wouldn’t say newbuildings are cheap at the moment and the orderbook is very large,” he explained.
    Meanwhile Precious Shipping managing director Khalid Hashim noted that they had already bought 20 ships which deliver across 2014 – 16. “What we are now going to do is sell 20 older non-eco ships,” he said.
    Source: Seatrade Global
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  • 2 uncontracted newbuilds, and one coming off hire.....hence the fear around PACD shares

  • Reply to

    news of UDW drill-ship going idle

    by jackmaster20 Sep 24, 2014 10:02 AM
    play_tow play_tow Sep 24, 2014 11:06 AM Flag

    4th, 5th generation equipment is caught in the squeeze more than the old legacy equipment, and more than the new 7th generation.

    The #$%$ equipment is even more so, with older equipment still be extensively used.

  • Reply to

    news of UDW drill-ship going idle

    by jackmaster20 Sep 24, 2014 10:02 AM
    play_tow play_tow Sep 24, 2014 10:28 AM Flag

    older rigs and newer rigs mostly competed in different markets.

    There has been too much conjecture that the old rigs (1980s/90s vintage) will simply be cold stacked, as the new rigs come on line. Fact is that many charterers are content with the efficiency and safety of well maintained older rigs, but do not wish to pay the high price day rates for the newer ones. Also, newer equipment has appreciably more downtime in the early going at least.

    Then there are those that require the sophisticated capability of the new rigs, and must charter them, and must compete in the high priced market for such rigs. The less capable older rigs do not compete in this pool, do not drive the price for this pool, and are most irrelevant for that pool.

    There are also nuances about geographical placement, and the competition in various basins (e.g. GOM vs Arctic, Brazil vs Africa). It can get even down to the location into which a new build is physically delivered.

  • India’s coal import rush leads to port congestion
    in Dry Bulk Market,Port News 23/09/2014

    Indian power and steel companies are importing shiploads of coal due to a severe shortage at home, leading to heavy congestion in one of the country’s busiest ports that now has twice the number of vessels waiting than its available berths.
    The over-crowding at Paradip port in eastern Odisha could derail India’s efforts to prevent a shutdown of more than half of its power plants which are running on stocks of less than a week in the worst deficit since a massive blackout in 2012.
    While Power and Coal Minister Piyush Goyal has urged power firms to bring more coal into India – already the world’s No. 3 importer of the fuel, the country’s ports are finding it difficult to deal with the swelling traffic.
    “We’re 100 percent houseful,” said G.P Biswal, deputy conservator of Paradip port. “We’re not able to cope with the sudden increase in traffic.”
    Half of the 27 stranded ships at Paradip are carrying up to 90,000 tonnes of coal each and it takes up to six days to offload a ship once it is berthed. Biswal said rains in the eastern part of the country over the past few days have hampered operations but there could be an improvement in a week.
    Some of the ships are to deliver coal for top power and steel firms like Jindal Steel and Power Ltd, Steel Authority of India Ltd, GMR Energy (IPO-GMRE.BO: Quote), Tata group and the Adani group – run by billionaire Gautam Adani.
    Congestion was higher-than-usual at some other ports too, said Prakash Duvvuri, research head at research firm OreTeam.
    Total coal traffic across all ports, including shipments within the country, rose 12 percent in August from a year ago. Paradip port, the biggest state-owned port by capacity, handled 16 percent more coal over the period, according to the Indian Ports Association.
    India’s coal imports have gathered steam after the Supreme Court ruled last month that the country’s decades-old method of allocating coal mining concessions was illegal and arbitrary, posing threat to 218 blocks handed out since 1993.
    The blocks include about 40 that are producing coal, estimated to have a capacity of about 9 percent of the 566 million tonnes India produced last year. The court has yet to pass an order on whether to cancel the blocks.
    “The court order, which is anxiously awaited, could be one of the prime reasons for the rising imports because the miners may either be feeling that the judgment may further be postponed or the judgment may not favour them,” said OreTeam’s Duvvuri.
    India is home to the world’s fifth-largest coal reserve but still needs to resort to imports in a big way as state-owned Coal India, which accounts for about 80 percent of the country’s output, frequently falls short of its output target.
    India’s overseas purchases of thermal coal, used in power generation, are expected to surge 11 percent to 150 million tonnes this fiscal year, online market operator mjunction said.
    Strong demand and the port congestion will help boost charter rates for ships, said Ian Claxton, managing director of Thailand dry cargo ship operator Thoresen & Co (Bangkok). Source: Reuters (Additonal reporting Keith Wallis in Singapore and Nidhi Verma in New Delhi; Editing by Himani Sarkar)

  • play_tow play_tow Sep 22, 2014 8:57 PM Flag

    I would have been very surprised, a year ago, if this stock lost 50% of its value.

  • play_tow play_tow Sep 22, 2014 2:35 PM Flag

    by this thinking, then Knightsbridge Shipping would appear to be the pure play on the ore trade...39 Capes, 34 being eco.

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