The company has yet to give in to stock market pressure on its share price for six years. But ultimately, key executives who are making little or nothing on their stock positions, and only about $200K per year in compensation, could face the music and realize the tune is unlikely to change. YOLO, I see the company being sold or privatized at a moderate premium to the current $2.75 per share price. Otherwise they could be content to eat the same bowl of oatmeal for breakfast every day all the way to retirement I suppose.
You remain public to 1. raise capital. 2. enhance value for public shareholders. This company is doing and has done neither. Void the cost of remaining public and privatize or sell-out to a larger entity.
50% chance it is a normal retracement of the individual stock and its recent rise. 50% chance it is the overall market testing and re-visiting the lows set on the small biotech's, IBB, social media, 3-D printing, and micro cap stocks that were savaged in March and April. It is unusual to get that kind of broad sell-off we had back in March for the most speculative a stocks (including the Russell 2000), and not have a re-test to see if those lows hold or get violated (i.e.,the other shoe dropping). Todays' sell-off has the earmarks of what happened in March/April particularly vis a vis the broader S&P 500 which is holding up much better, and particularly given the expansive nature of the small cap sell-off today (almost everything small is getting ripped, particularly the specific groups cited above).
clarification: should say taking advantage of the periodic bullish SA articles, not really using them, as I do not think it is the author of the articles selling the stock, but rather another (institutional) entity perhaps using the $1 to $2 share price pops those articles provide to lighten. The stock is having difficulty clearing the 200-Day moving average and staying above it. Trading range still looks like $11.50-$13.50 IMO.
I think I recall seeing somewhere that Tesla uses PRCP technology. More important is your call that above $13 per share the stock is "sold to you". Feels like an institutional sell program is in place working the order each time the stock pops its head above $13. Just a guess, but a very well educated guess, based in part on the belief someone is using the periodic bullish SA articles to exit a position here.
Not bashing (I am long the stock). Not bad information. On the last call what mgmt. really said is that they were looking at all options for the rig from mid-July to end of October and expected they could make the transition (period) "seamless". They did not say it was definitely contracted mid-July to end of October. All the industry press and North Sea rig status reports still have that period as an option period for WilPhoenix, not an under-contract period. Maybe the odds are 70%, 80% or even 99% that Premier ultimately exercises the option and leases the rig for mid-July to end of October. Until I see a status report that says "Under Contract" I will assume nothing. Look up the word option in Webster's dictionary. Management was very careful not to say the rig had been contracted on the CC. They can expect anything they want. So can you. But before throwing around words like basher or bad information check your sources. Go to Rigzone of KLenergy. The rig is under option not contracted. I hope it gets contracted. I learned a long time ago rose-colored glasses and hearing what one wants to hear can result in some big investment losses. BTW, I am wicked long the stock as I said. Willing to add more on any dip, and maybe even if it doesn't. Attention to detail has made me a lot of money through the years.
Wish they could have gotten it done at 6% or a bit less given the "locked-in" nature of their contracts on the two rigs for the next couple to three years. But I quibble. Lenders hear the word oil or drilling---then they always price in inordinate risk premiums. It was a smart move by smart management.
Think the company had been at odds w/BDO over accounting issues for some time. Both parties probably relieved to dissolve the association. Separately, Valdosta insurance proceeds should provide a bit of a cushion for PESI. Now they need to get operating cash flow back on track.
First, it would be primarily a one quarter event for Q3 of 2014. Second, the WilPhoenix would work at least two weeks at a very high day rate. The WilHunter would be working full-time at a bit better day rate than it did in Q2. If idle for the remainder of the quarter, the WilPhoenix would obviously not be cold-stacked since it is under contract after the end of October to Apache, but I imagine even in warm-stack mode some costs could be reduced in the absence of revenue. A quarterly dividend of between $0.60-$1.20 to guess a range for Q3 (depending on whether the current contract is extended for three months), is still a double digit percent yield on an annualized basis, even in a very conservative worst case scenario. And that is just for one quarter. Not a huge risk if one is holding the stock for 3 to 10 years IMO. You could do worse than to place your bet w/management's ability to realize as much of the dividend as we are used to for Q3. It's enough to say we have all become accustomed to a 20% annualized yield.
The next call is not until around August 13, when 2Q results get reported. The industry press (Rigzone, KLenergy, Pareto, among several others etc.) will report the rig status well before then, no later than July 15. Hoping to get a feel before then, but probably just have to guess based on oil price action and expected demand. Either Premier extends for 3 months or Apache takes it early or it sits idle. Nobody else is probably gonna take a rig for just three months. Three months is a blip in the big picture, but a blip that might allow one to buy the stock a bit lower if the rig goes idle for a short period. On the other hand, if the contract gets extended by Premier from mid-July through the end of October, the stock could run before one has time to act on that news (algorithms price it instantaneously). Like i said, was hoping to get a feel, and mgmt. sounded like contract extension was a possibility--but we are only two weeks away and have heard nothing. One strategy I suppose is to add a half position (buy a pig-in-the-poke on pure speculation, i.e., if you like the stock long term anyway), and either add the other half if the rig gets extended or abstain if it does not.
No misinformation. Possibly a misread by you. The WilPhoenix is under contract w/Premier until mid-July, and then gets picked up by Apache beginning in November. There is the possibility of an extension of the contract w/Premier from mid-July to end of October, or even the possibility of Apache taking the rig early before the end of October. Those are possibilities only. As far as I know, those possibilities still exist but have not been realized yet. Hence, the rigs is best conservatively estimated as not under contract beginning mid-July for a few months. If you want to assume it will have no downtime, then that is your assumption, not a fact as far as I know, though it may indeed end up that way. It is a minor consideration only, and will not matter looking back years from now. It is a small wiggle that might allow the opportunity to buy the stock a smudge lower--not a big deal. Still long and very positive on the stock. Good luck.
Thx. Have not looked at SOHO. I see that it already had a good run over the last year, nearly a double, not that that disqualifies it from consideration. Take a look at AWX and PESI. PESI has both maximum risk and maximum leverage, not for the faint of heart, but a swing for then fences type idea. AWX is just plain cheap, and really was a value trap historically, until they started up the injection wells.
Plus you may not want to go deep long until you see Wellington's holding status as of June 30--look for their 13F filing around August 15--- only six weeks to wait. If it shows they are completely out, then one might feel better about green light status.Until then, they are an overhang. Not a stock you go half-way on as a big institution IMO. You either buy the Helix story as a game changer or you don't. No sense being half-pregnant.
It's a great little trading stock off earnings announcements and SA articles. Actually, the latter usually provides more fireworks. Even if you hold it as a long term core position, there are multiple opportunities to trade around it.
more important than a one-time P&L gain, they can use the cash. Hope for operating cash flow break-even in Q2, and a government fiscal year-end spend off in Q3. Could set them up for 2015. Then in 2016 it could be all about the politics again, but not really too worried about that now.
Really think I need to hear about the status of the WilPhoenix for mid-July through October time frame, as that could impact the dividend pay out in Q3 and Q4. Only two weeks away and no one seems to know what is happening, or not happening as the case may be w/that rig. Gotta be risk averse and conservatively assume it goes idle for three months until I hear otherwise. Surprising, as this company is pretty transparent w/shareholders. I assume there must be no change in status (i.e., no operator has extended or picked up the rig early) and that is why management has said nothing. Stock is a buy in any event IMO , but may get it a bit cheaper if that rig goes on idle time for three months. Just a timing decision on when to add to a position, nothing more.
Read it. 1. Nothing about prospects re: upcoming idle period for WilPhoenix mid-July-October. (not in Subsequent Events section either). 2. They refer to making cash flow projections for a couple years out to ensure ability for meeting debt payment requirements. Not worried about debt requirements being met, obviously, but sure would love to see those projections, including expectations as regards the WilPhoenix near term and the impact of the new tax regime). I suppose those are only for internal consumption, the auditors, or bank? WilPhoenix could suffer some very small idle time (but hopefully they can find a oil company that wants it for a few months) and taxes are going to bite a bit, but offsetting that----contracted day rates are going up. Guesses from anyone on dividend amounts for remainder of 2014, 2015 and 2016?
Didn't see any news release or CC information re: status of WilPhoenix for three months from Mid-July to October. Did anyone attend the meeting? Did the issue even come up? Thx in advance.