ChicagoB

ChicagoB
Contributor since: 2012
Company: C.C. Hedge
Ensco plc (ESV) announced today that its Board of Directors has declared a regular quarterly cash dividend of US$0.50 per Class A ordinary share payable on 22 March 2013 to holders of Enscos shares as of the 11 March 2013 record date. The prior quarterly dividend was $0.375 per share.
Chairman, President and Chief Executive Officer Dan Rabun stated, Our strong financial position and positive outlook for future earnings growth supports this increase to our quarterly cash dividend. Contracted revenue backlog is now a record $11 billion. Our active fleet has grown with the commencement of two additional ultra-deepwater rigs this quarter alone. And our fleet will continue to expand as we deliver six new rigs through the end of next year, which we expect will earn favorable day rates and multi-year terms. We continue to have a very bullish outlook in terms of customer demand for both deep- and shallow-water offshore markets. These factors give us significant visibility into future cash flows.
Mr. Rabun added, Management and the Board believe the new dividend payout is prudent and sustainable. We expect that we will continue to have adequate liquidity to meet capital commitments for our rigs under construction, as well as sufficient flexibility to make new investments and return capital to shareholders.
Ensco plc brings energy to the world as a global provider of offshore drilling services to the petroleum industry. For more than 25 years, the company has focused on operating safely and exceeding customer expectations. Ensco is ranked #1 for total customer satisfaction with top honors in 10 of 16 categories in the most recent annual survey by EnergyPoint Research. Operating the worlds newest ultra-deepwater fleet and largest fleet of active premium jackups, Ensco has a major presence in the most strategic offshore basins across six continents.
And that's sub-$500 within 11 days..
Let's see what we get from Cook on Jan 23
UPDATE 4-Galaxy phones power Samsung to record $8.3 bln profit
Tue Jan 8, 2013 8:54am GMT
* Q4 operating profit estimated at record 8.8 trln won
* Q4 sales estimated at 56 trln won
* Analysts predict handset division profit doubled from yr-ago
* Strong handset pipeline, chip recovery to lift 2013 profit - analysts
http://reut.rs/Uyi9js
"Has the author ever used an iPhone 5? If so, he would not have written such an ignorant statement."
You talkin' to me? Well, to answer you question. I got a Samsung Note II/N2 (referred to as a phablet, no kidding!..) 7 weeks ago to replace my iP4S, and honestly.. it's an awesome piece of kit! Haven't touched the 4s since, and after watching some HD HBO on the thing I can tell you I'm com-plete-ly sold.
No iPhone 5 or 5S for me, perhaps I'll have another look when they introduce the 6. I even sold part of my AAPL to reinvest in SMSN.
So yes, I do have some clue what I'm talking about.. do you? Have you actually used the S3 or N2 for 5 minutes to directly compare

If AAPL goes below $450 I'll buy some more, otherwise I'm good with what I bought a few years back. Will continue to hold next to SMSN.
Agreed, for sure less than some anticipated.
A good settlement for RIG, the stock should perform well in 2013.
Lenovo Group Ltd Adr
http://bit.ly/TSAKGK
Thursday, December 6, 6:50 PM Baidu (BIDU) is partnering with Lenovo, now China's #2 smartphone vendor (per IDC), to offer the LePhone A586, a $158 device running on Baidu's Android-based OS. The A586 sports a 4.5" display and dual-core Qualcomm Snapdragon processor, and supports Baidu's cloud services. It's the kind of product Baidu needs to see more of as it works to improve its mobile search share and ad sales, and is also the kind that has fueled Android's Chinese share gains - the 16GB iPhone 5 sells for over 4x as much unlocked.
Samsung and Lenova, one and two in China
Lenova is growing quickly, also in PCs
Record date September 21, 2012
Payout January 29, 2013
Ship Finance International Limited (SFL) Q3 2012 Earnings Call November 29, 2012 10:00 AM ET
..In light of the soft tanker market, there have been some questions from investors relating to our financial exposure on vessels on charter to Frontline. We would like -- therefore, like to take a moment and just give some background for that transaction and those vessels and also illustrate what the financial exposure is.
The original fleet of 47 vessels was acquired in 2004 and another 5 vessels added in 2005. But after that -- so for the last 7 years, we have only reduced the number of vessels chartered to Frontline and we are now down to 25 vessels after the recent sales. This has been through the sale of the oldest vessels in the fleet, and we do expect this process to continue in an orderly fashion.
At the same time, we are amortizing down the debt relating to the vessels very quickly and have reduced the financing amount by 60% over a period of only 4 years. Compared to reported scrap value levels, the financial leverage is now only marginally higher than the scrap value of the fleet but the scheduled amortization continues with more than $70 million per year. The graph on the right side illustrates the difference between the loan amount over time and the scrap value of the fleet with the basis of the current scrap price per ton.
The next refinancing we have relating to these vessels is in 2015, but the refinancing amount is limited to $222 million on a fleet of vessels which was refinanced last time in 2010 at $725 million. So by that time, $500 million will have been paid down on the loans relating to those vessels.
At the same time, we note that despite the poor market in the third quarter, Frontline reported a strong cash position of $165 million, which was only marginally lower than the $177 million reported at the end of the second quarter.
We still have a significant portfolio of long-term charters, which is the backbone of our business. Most of our vessels are chartered out on a long-term basis, and we still have closed more -- close to 10 years weighted average charter coverage on our fleet. For full details on a vessel-by-vessel basis, the chartering overview is available by contacting us on email at ir@shipfinance.no.
At quarter end, we had $5.4 billion of fixed-rate order backlog, which represents approximately $63 per share after we add -- based on 85 million shares, which we have after the recent equity offering. The EBITDA equivalent backlog is $4.3 billion or around $50 per share. And these numbers include only the reduced base rates from the Frontline vessels and do not include expectations for cash sweep, profit share or rechartering after the end of the current charters that we have in the portfolio.
We have a total of 16 customers today and more than 40% of the portfolio is with companies with a market cap in excess of $5 billion. If we include all these companies, the percentage is 83%. And in addition, a majority of the backlog in the private segment is with companies with a public rating and therefore where information is easily available both for us but also for our investors so they can assess the quality of our backlog.
If we look at the average weighted charter tender as indicated on the right side, we see that we have 2/3 of the portfolio still in excess of 10 years and only 2% of the backlog with charters shorter than 5 years.
Microsoft is playing the long game like Google did with Android. Apple is slowly beginning to lose ground to Samsung. WM8 will come into full force next year on loads of new tablets and smartphones. MSFT will have a good 2013-2014, no doubt
Finally sold and switched to RIG and ESV again. Revenue and EPS less than anticipated, downtime and costs up more than anticipated. Don't like the Q3 results, but sure as hell don't like them selling the tender rigs. They should keep the eye on the ball instead of focusing on listing of all these dropdown subsidiaries - SDLP, NAD and Seabras. Also less then impressed with the answers provided in the conf call, the CEO stuff, and the move from Norway..
Thanks for the info XF,
Car carriers earned an average of $11,000 a day in 2011, the average rates for this year are already 35% higher at around $15,000 a day, the highest since 2008. Next year's projected rates are another 20% higher to $18,000 in 2013. Those rates apply to 550-foot vessels, capable of hauling 4,000 cars.
Shipments have risen 10% in 2012, more than twice the fleet’s expansion. The reason these carriers are making the most money since 2008 is simple, record production and increased demand from emerging markets means more cargoes.
Increasing Asian demand for European luxury cars means that vessels that previously returned to Asia empty after delivering cars to Europe are now picking up more cargoes for the return leg.
China imported over 51,000 cars a month last year, three times more than in 2009, and European vehicles - VW, BMW, Mercedes, Porsche, Ferrari - account for 73% of that total. Car sales in emerging markets - Eastern Europe, the Middle East, Africa, India, China - continues to grow.
Seems a sensible move on SFL's part..
Overnight? He was jailed for nearly four months on a bogus charge!
"In November 1986, prosecutors charged Fredriksen and several of his senior executives with directing his crews to steal crude from vessels and use it as bunker fuel to power them. They also accused him of defrauding the cargo’s insurer, Oslo-based Gard AS, and endangering the lives of crew members by using crude as a marine fuel. Fredriksen denied the allegations.

Kristiansen says what appeared to be theft was actually a problem in how the oil was weighed. He says the Iraqis had destroyed the shore tanks at Kharg Island. Crews had to load crude directly into Fredriksen’s tankers without letting it sit for a few days so that sand and sediment could settle before it was shipped. The oil weighed less on delivery because the solids settled during the voyage. They claimed we stole thousands of tons, and it was pure rubbish,” Kristiansen says.
Fredriksen was locked up in a jail for almost four months pending a trial. He rapidly lost weight and taught himself to knit, producing sweaters for his twin daughters, Kathrine and Cecilie. Fearful his business was doomed, he directed Kristiansen to sell his fleet even though transport rates and ship valuations were rising. The decision cost him $300 million.
“That used to be a lot of money,” Fredriksen says with a wry smile. He says he paid a fine of 1.5 million kronor ($250,000) five years later to settle the case before trial, and he didn’t admit guilt."
* Seadrill may move to London, Singapore
* CEO Thorkildsen disagreed with move, leaves firm
Shipping tycoon John Fredriksen announced on Wednesday plans to move management at Seadrill out of Norway, prompting the chief executive of the world's biggest deepsea drilling rig owner to leave and opening a new chapter in Fredriksen's controversial love-hate relationship with his former homeland.
Seadrill's chief executive Alf Thorkildsen disagreed with the step and announced his departure, to be replaced by Fredrik Halvorsen, a key executive at two Fredriksen companies, well services firm Archer and Frontline.
"The message from the company was clear that they are considering moving and this should be priority number one," Thorkildsen was quoted as telling Norwegian online news portal E24. "So I decided it was time to go."
Thorkildsen was reported as saying that Norwegian costs were indeed very high but Fredriksen's "attitude" to Norwegian authorities was a factor.
Oslo-born Fredriksen, known as "Big Wolf" for his bold business deals, has been in dispute with the Norwegian authorities for years and has traded his citizenship for a Cypriot passport, calling the move an "escape".
He now lives in London but often criticises the government of his former homeland, where he was once detained for several months during a fraud investigation before being cleared of wrongdoing.
http://bit.ly/PYZrB8
"The Company intends to use the net proceeds of this offering to invest in new assets within the shipping and offshore sectors and for general corporate purposes, including working capital."
Seems to me J.F. and his team consider the current economic climate with depressed values, especially in shipping, an opportune time to make a few well-thought-out investments. The offshore market is booming, so why not make a few investments there as well. The stock markets have been stalling as of late, so better to place shares now instead of waiting.
On Frontline, FRO earned on average $31,000 per day in Q2 2012 compared with $25,600 per day in Q1 for the whole VLCC fleet. The Suezmax fleet in the Orion Tanker Pool earned $17,400 per day in Q2 compared with $19,200 per day in Q1. Frontline earned on average about $16,200 per day in Q2 2012 compared with $19,500 per day in Q1 for the whole Suezmax fleet. OBO earned $28,100 per day in Q2 compared with $37,800 per day in Q1, mainly due to redelivery of vessels on charters. Frontline outperformed peers for VLCC in Q2, but the earnings for Suezmax was disappointing.
Frontline’s estimated average cash cost breakeven rates for remainder 2012 are approximately $23,900 per day for VLCC's, $17,600 per day for Suezmaxes and $12,300 per day for the OBO's. The number of vessels in FRO’s fleet in Q2 2012 was 57 vessels: 36 double-hull VLCCs, 2 single-hull VLCCs, 15 double-hull Suezmaxes and 4 OBOs.
Details Frontline Restructuring December 2011: http://bit.ly/WdvpMq
Frontline’s balance sheet Q2 2012: http://bloom.bg/VaO8u1
Frontline’s fleet list, October 2012: http://bit.ly/Wdvsb2
Frontline's newbuilding program as of Q2 2012 encompasses 2 Suezmax tankers, total contractual cost $125 million. Paid installments $12.6 million, to be paid $112.4 million: $25 million in 2012, $87 million in 2013.
Frontline’s strategy is to try to dispose of older ships which are not performing or even covering the operating cost. They have reduced cash breakeven rates following the restructuring end of last year, giving some downside protection. I cannot say exactly how much ownership FRO currently has in Frontline 2012. I read 7.9%, but that seems a bit low.
Effective 1 January 2013, Nordic American Tankers (http://bit.ly/VaOcKi) will assume 100% ownership of the Orion Tanker Pool - established autumn 2011 -, purchasing Frontline’s 50% share in Orion at nominal book value. Orion’s deal with ExxonMobil (http://bit.ly/tVVFv0) - announced May 2012 - is expected to remain in place.
It does feel like high stakes poker at times, big bets are fine as long as you’re able to play them correctly. It’s almost getting to the point where you would prefer speculative building and debt issuance to take a breather until the newbuilds for 2013 and 2014 are delivered and drilling away.
Transocean announced four new UDW drillships as well, backed by a letter of intent from a NOC or IOC, associated contract backlog $7.6 billion for 40 rig years (4 X 10Y).
Well Imkul, thanks for the 'interpretation' and 'tips' (Pats on the back, the necessity of it all, much to contemplate). Let’s compare alpha sometime, you undoubtedly rock.
I'm reminded of Edward Abbey: 'An empty man is full of himself' (,and 'a drink a day keeps the shrink away').
Have a good trading day!
Offshore drilling services firm Seadrill Ltd (SDRL) is spinning off its offshore rig business to a new company to be called Seadrill Partners LLC. If a filing with the SEC, Seadrill Partners said it will seek $225 million in a public offering at a yet-to-be-determined date. The company did not say how many shares would be offered, but did say the firm would trade on the NYSE under the ticker symbol ‘SDLP’.
Seadrill Partners said it is an “emerging growth company” that currently has long-term contracts with oil majors Chevron Corp. (http://bit.ly/rBKwmy), Total SA (http://bit.ly/ontL3t), BP plc (http://bit.ly/yQLIVc), and Exxon Mobil Corp. (http://bit.ly/tVVFv0).
Seadrill Ltd. will own 70% of the common units of Seadrill Partners following the IPO. The new company also plans “to make accretive acquisitions of drilling rigs from Seadrill and third parties” under an agreement that will give Seadrill Partners a first right to purchase additional interests in a jointly owned operating company and “a right to purchase any drilling rigs acquired or placed under contracts of five or more years after the closing date of this offering.”
According to the filing, Seadrill Partners will use the proceeds from the filing “as consideration for the acquisition of our interest in [the jointly owned operating company] from Seadrill.”
Operating revs moved from $478.3 million in FY10 to $497.2 million in FY11. For the first six-months of FY12, revs improved 11 percent to $275.2 million. Net income for FY10 was $176.5 million, dipping to $141.1 million in FY11. For the first-half of 2012, net income rose 5.6 percent to $93.9.
Citigroup is the sole underwriter of the offering.
You gotta love Fredriksen, if you invest in several of his companies for a decade you usually double your money and get a couple of IPO's to boot, which tend to spin-off assets as well.
Ship Finance was spun off from Frontline. SFL is now planning to spin-off its container division at some point. Fredriksen is looking into orders for containership newbuilds. Ship Finance's second-quarter $61.2 million profit did include a $16.3m cash sweep from Frontline.
Don't sweat it Shin, we’re already in a situation of ‘why even bother’. Power Hedge, White, Qineqt are posting Seadrill articles every week, literally. Rehash here, fleet report there. Pushing down Valuentum, Jensen, Dumb Money. First Seadrill, Transocean. Noble, Ensco followed quick enough, check publication. Remember, trading is net return, not hit rate!
Imkul,
That warrants a response! You should have noticed that I actually linked!!!! to the original Bloomberg article which provided the excerpts used for the introduction of this article.
2/3 of the information in this article is from other sources than the >linked< article. I also read the article on Fredriksen a few days ago, and I consider that article to be top-notch journalism (very rare nowadays), and feel no qualms at all! about wanting to share parts of that interview with my fellow SA-readers in this piece, while >linking< to the BB-article at the same time!
Most of the information included in articles here on SA originates from other sources. Be careful with using words like 'plagiarism' in the future, when someone clearly inserts the >link< to the original piece!
I have been (very) critical of Seadrill's high leverage business model in the past, as some of you may know. Additional insight and information gathered in the past two weeks, and the Bloomberg interview, have firmly changed my mind on this company and Fredriksen's overall leadership of Frontline and Seadrill. Therefore I feel it's useful to share this with you guys. And yes, I actually opened a position in Seadrill.
Your numbers are inaccurate; your PEGs and especially your P/S for Transocean is way off. You leave Noble Corporation out and recommend a driller with 3 times more debt-to-equity than NE, 2 times that of ESV, and 1.5 times that of RIG, primarily because of a dividend. Clever to use enterprise value, .but you should have provided a link to SDRLs balance sheet for the past quarters. Look what is going on with total equity, look at liabilities
Agree with the title, Valuentum's / Brian Nelson's analysis is spot on. There are better opportunities out there. Yes, dayrates are on the rise, but all drilling contractors are profiting from this, not just SDRL.
Why go for the number four driller, when numbers two and three have largely brand new fleets as well, much stronger financial positions, more flexibility due to low debt and conservative financial policies, equally impressive growth.
Since when have dividends become more important than balance sheets?
Article on number two drilling contractor Ensco (http://bit.ly/Gztvwv):
http://bit.ly/NYiQz2
Article on number three drilling contractor Noble Corp (http://bit.ly/N0itJu):
http://bit.ly/NYiSqu
Rigs + newbuilds:
ESV: 80
NE: 79
SDRL: 66
Balance sheet ESV: http://bloom.bg/QkErSL
Balance sheet NE: http://bloom.bg/Q3NfAh
Balance sheet SDRL : http://bloom.bg/QkEtdj
Numbers speak louder than words, simple arithmetic (to quote B.C.)
Compare liabilities, compare equity. Either ESV and NE are under-priced, or SDRL is overpriced. You can't have it both ways.

Why go for the number four driller, when numbers two and three have largely brand new fleets as well, much stronger financial positions, more flexibility due to low debt and a conservative financial policy, equally impressive growth.
Since when have dividends become more important than balance sheets?
Article on number two drilling contractor Ensco (ESV):
http://seekingalpha.co...
Article on number three drilling contractor Noble Corp (NE):
http://seekingalpha.co...
Number of rigs incl newbuilds under construction?
ESV: 80, NE: 79, SDRL: 66
Balance sheet ESV: http://bloom.bg/QkErSL
Balance sheet NE: http://bloom.bg/Q3NfAh
Balance sheet SDRL : http://bloom.bg/QkEtdj
Numbers speak louder than words, simple arithmetic (to quote B.C.)
Seadrill is a Norway-listed, Bermuda-based rig operator, not a U.S. company. Its chairman is John Fredriksen, Frontline-Fredriksen. Fredriksen had to backstop Frontline (FRO) when seaborne trade collapsed, and therefore shipping rates. Frontline cost U.S. investors a lot of money. Until FRO went down the tubes it had a similar shareholder, debt, and spin-off policy as SDRL. FRO is your perfect example why too much debt is bad when the market turns against you. It does happen, also in the contract drilling business.
Ensco (http://bit.ly/Gztvwv) and Noble (http://bit.ly/N0itJu) also have a largely brand-new deepwater and ultra-deepwater fleet (so has RIG by the way). Even with SDRL's rigs on order, RIG, ESV and NE will remain the top-3 drillers. They all have much, much lower debt-to-equity than SDRL. RIG has never had a continuous dividend, they determine their policy on a yearly basis. ESV and NE both pay steady and growing dividends, at a realistic long-term level, unlike SDRL. One major setback and SDRL could be in trouble, I say could! If you like a driller with the size of SDRL, you should check out Diamond (http://bit.ly/vjU5Q3), debt-to-equity is 0.33 instead of 1.75 for SDRL.
You're THE LEADER when your 'business' is 'leading' in terms of rigs, size and revenue. Market value means squad. SDRL's dividend and market value are a joke when you realize their debt-to-equity is 1.75, when you have ESV at 0.43 and RIG at 0.82. SDRL is way overvalued compared to its peers. There's much more, but this is sufficient for now until you further elaborate.
Dayrates are strong across all asset classes in all regions due to undersupply. All operators have discussed upward-trending dayrates and undersupply in all regions. You can hardly go wrong with any of them.
So why not go for ESV instead? You're long both, but many will choose one or the other. Ensco has a $1.5 dividend (2.7 percent yield), Price-to-Book virtually identical to RIG, and a recent addition to the S&P500.
SDRL has taken advantage of historically low interest rates to expand their fleet from 23 to 48 rigs (12 co-owned), with 18 additional rigs under construction. I just don't like SDRL's Debt-to-Equity of 1.75! (ESV 0.43, RIG 0.82), and it's a Fredriksen-controlled firm (Frontline).
It concerns a joint partnership between Telefonica's digital unit and Abu Dhabi-based Etisalat that will expand Telefonica Digital's market by 17 countries and 170 million customers.
"The two firms will work together in a number of areas, including machine-to-machine (M2M), financial services, cloud computing and mobile advertising" (PR)
"revenues at its digital division to grow at an annual rate of 20 percent and that the unit will raise around 5 billion euros ($6.26 billion) for the company by 2015." (PR)