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A Prudent Investor  

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  • Seadrill: Market Overreacts To Nicely-Priced Debt Offering [View article]
    The $650M convert is a hybrid debt/equity feature that reduces the conversion price over time. That is why Seadrill reports the $650M as debt and equity on its balance sheet (577M debt $73M equity).

    That is why Seadrill has to offer 3,612 shares for each $100K note plus accrued interest and cash incentive. The author claims that this is old news but the conversion event has not been priced in the shares. These are the type of deals that unrated/speculative bonds produce. These converts are trading at 150% to par as of 12/31/13. I also warned people that they were not using the correct share count because they ignored these convertibles. You have to spend insurmountable time digging to uncover the financial toxicity with Seadrill. I don't know if any US institutional investor owns Seadrill.
    Jul 10, 2014. 01:21 PM | Likes Like |Link to Comment
  • Seadrill: Market Overreacts To Nicely-Priced Debt Offering [View article]
    Toga, I am not attacking the oil and gas industry or anyone. We will be heavily dependent on hydrocarbons for many decades. Oil exploration was not dreamed up yesterday either. I have large positions in top quality oil related names such as SLB which is up 100% in 2 years. SLB covers a broad spectrum of services and sectors. My agenda is to call out misinformation and rampant pumping from people who only seek their own self interest. I will say it again, I am not short Seadrill or own puts.

    I do not understand with your knowledge why you would own Seadrill when your thesis fits SLB. Is it because of a dividend that you anticipate from Seadrill?

    These past few days with the Seadrill finance debacle shows the urgency of their debt structure and attempt to tap the markets which were to be issued without a prospectus to "qualified investors" The markets reaction forced them to pull it back after they said it was oversubscribed. Who is running the company?

    The market is saying we don't want anymore debt. More debt is coming. Now they announce a bank deal a day later and everyone is cheering for more debt. The bank debt is secured, variable, contains covenants, and is more costly. The existing $650 million convert will cost shareholders $948 million or more in dilution and dividends. The additional dividend only is another cash drain of $93 million annually. Seadrill needs two important events to survive. First, a reduction or elimination of its annual dividend of $1.9 billion and a huge equity raise of $4-$8 billion. Seadrill grew in size through debt and not over years of accumulated earnings. There new fleet is fully encumbered and more debt ridden rigs are coming without contracts. You seemed to be confident about your knowledge in the energy industry but that does not always translate positively as an investor.

    Even a bird is smart enough to build a nest before laying eggs. JF is a gambler and runs his businesses with other peoples money. I have too much experience and knowledge to let unknowing people get burned. Ignore me if you wish. You can't go broke with a profit. Just look at what happened today with Espirito Santo. The market has no mercy for defaults and shenanigans. Insiders try to cover up the dirt and mislead. When that happens, shareholders get tickets on the Titanic.
    Jul 10, 2014. 01:17 PM | Likes Like |Link to Comment
  • Seadrill: Cash Flow Doesn't Support Dividend [View article]
    Ask Frontline investors the helping hand JF gave them. Now TankURat needs to inform people how much cash JF has to bail out Seadrill. JF can't save Seadrill. He will save himself. Hilarious!
    Jul 10, 2014. 12:42 PM | 1 Like Like |Link to Comment
  • Seadrill gets commitments for $1.35B credit line [View news story]
    The bank debt was the only option after the convert collapsed in their face. I owned Seadrill shares far longer than you have and smarter to sell it at a $23 per share profit. So I am well qualified to comment on it. It took 17 banks to participate in this small refinance. Each bank limited their exposure and you have no collateral and stand behind them. Good luck!
    Jul 10, 2014. 12:41 PM | Likes Like |Link to Comment
  • Seadrill gets commitments for $1.35B credit line [View news story]
    When you are in the storm the ship capsizes. Seadrill is in a 500 year storm.
    Jul 10, 2014. 12:41 PM | 1 Like Like |Link to Comment
  • Seadrill: Cash Flow Doesn't Support Dividend [View article]
    User, you can follow me. I don't mind. Seadrill's collapse will occur within 12-18 months which does not mean I have blessed it for 12 months but rather sentenced it for 12-18 months. Keep buying and the smart money is selling!
    Jul 10, 2014. 11:43 AM | Likes Like |Link to Comment
  • Seadrill: Cash Flow Doesn't Support Dividend [View article]
    Here is a scene of Seadrill's future:
    Jul 10, 2014. 11:41 AM | Likes Like |Link to Comment
  • Seadrill: Cash Flow Doesn't Support Dividend [View article]
    Does any Seadrill investor know that Seadrill is an unrated company. As a result is incurring annual increases to its fixed debt by 50 basis points which is substantial. Warren invests in moats and not sinking boats!
    Jul 10, 2014. 11:41 AM | Likes Like |Link to Comment
  • Seadrill gets commitments for $1.35B credit line [View news story]
    Here is my analysis Husker Bob, this is a refinance and they only managed to re-fi a small portion of their $18 billion of debt due in less than 3 years and they were only able to squeeze out $350 million for additional funding. Now 17 bank consortium has encumbered these rigs at a variable rate. A 2% plus base rate margin is not cheap debt. There is no such thing as cheap debt. It shows that they had this re-fi already when they announced their convertible offerings. They didn't create a consortium bank loan over night.

    Seadrill shot themselves in the foot with public nonbank unsecured debt and now they have to take the bank's deal. The convert deal had a two day window with no prospectus which means it was rushed and ill planned. You can rely on half truths but I like the whole truth when I invest. If I have to spend the time questioning managements financial decisions every day. I'm not interested. There are a lot of investment grade well run and prudent companies to invest. Its your money at risk and not mine!
    Jul 10, 2014. 11:29 AM | 2 Likes Like |Link to Comment
  • Seadrill: Market Overreacts To Nicely-Priced Debt Offering [View article]
    Toga, I believe that my handle has been misused many times but you don't seem to care about that. Many blatant attacks by you and your buddies have been removed. I could have many more removed if I bother to request it.

    You seem to be one sided and my view is contrary to yours in a very big way because I don't rely on hype and misinformation. This entire SDRL listing on SA is rife with it. I have been investing in the oil & gas space for a long time. Far longer than TankuRat's 2005 epiphany with JF and his companies. While TankuRat is gambling with his IRA, I don't recommend retirees to fall for the high yield trap that is presented by SDRL and all of its related companies. You don't need to read my comments or react to them, but there are many who read them objectively even when they are brutally harsh. The tone and the message needs to be harsh because the level of stubbornness, gullibility and ignorance is extremely high with older retail investors who think they understand finance or the markets by looking at a stock quote.

    If you limit your holdings to less than 3% for speculative stocks, that should be prudent. Many are trying to get rich on SDRL, I like to stay rich and that is why I would avoid SDRL et al. I sold my shares in SDRL a long time ago at a $23 per share profit on 5,000 shares.
    Jul 10, 2014. 10:30 AM | Likes Like |Link to Comment
  • Did Seadrill Partners Overpay For West Auriga? [View article]
    SDRL is the managing member which is what a GP is in a limited partnership. I relied on the annual report which is audited and more reliable that internally prepared interim financials. SDLP is charged with a management fee by Seadrill as well. SDLP relies totally on Seadrill to operate. Your cash flow assumptions are way to high and it is evident from the financials.
    Jul 10, 2014. 10:29 AM | Likes Like |Link to Comment
  • Seadrill: Market Overreacts To Nicely-Priced Debt Offering [View article]
    You use omens to buy shares? That's novel. Are you confusing omen with ominous?
    Jul 10, 2014. 09:32 AM | Likes Like |Link to Comment
  • Update: Seadrill Withdraws Bond Offering Following Market Overreaction [View article]
    Seadrill just announced a re-fi deal a day after the failed bond deal. They could have also included that in their press release with the bond offering. They didn't put together a 17 bank deal in a day. All they have done is buy more time and debt to handle the $18 billion of debt maturing in less than 3 years. Seadrill's press releases are an attempt to mask their financial weakness and fool retail investors.

    How are the convertible bond holders feeling right now? Not good!
    Jul 10, 2014. 09:31 AM | Likes Like |Link to Comment
  • Seadrill: Market Overreacts To Nicely-Priced Debt Offering [View article]
    His cash will be used to take out Seadrill shareholders like he did with Frontline. You are unbelievable TR. Your ticket to the Titanic is SDRL!

    It's always the second mate's fault when the ship sinks! Nice try TR!
    Jul 10, 2014. 09:31 AM | 1 Like Like |Link to Comment
  • Seadrill: An Opportunity For Believers? [View article]
    These rigs were already financed. Seadrill needs operating cash and substantial equity financing to handle $18 of debt coming due in less than 3 years. You are being fooled by press releases. Seadrill just burned both convertible bond deals and lost a lot of trust and credibility and an act of amateurism. Look at the whole picture and not what pleases you.
    Jul 10, 2014. 09:07 AM | Likes Like |Link to Comment