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  • Awilco Drilling: Sell Scrap Analysis And Worries Gives Huge Opportunity [View article]
    @Highondividends, good points. I have previously written an article and comments that debate most of your key points and I would also like to argue that their is a intangible moat for awilco primarily management and owners strong performance and capacity. Furthermore it operates under a jurisdiction that allows them to have a economical and tangible moat; Entrants have high entry barriers for initial capital cost, waiting times/certifications which essentially limits the number amount of rigs.

    Nonetheless, an negative outcome on the current tax issue might strike awilco quite substantially, in the short term, to the extent that they might have to lower dividend to 1 dollar already in Q2, but I'd expect management to not do that and sustain its dividend by its cash.

    @3Tavgreg I will do an update shortly
    Feb 26 04:24 PM | Likes Like |Link to Comment
  • Why Oppenheimer Holdings Does Not Have Any Discount Today [View article]
    I did not cover earnings that much because a quick look combined with business fundamentals made it irrelevant(for me). Sovereign debate covered in C). I don't agree upon the tangible book undervaluation. I would have to agree on your last sentence but would add OPY to the list too. Im content staying out of it for now.
    Jan 30 01:32 PM | 1 Like Like |Link to Comment
  • Why Oppenheimer Holdings Does Not Have Any Discount Today [View article]
    1.Ofcourse its struggling and you will find these factors if you read the actual article and stable/stagnant in the sense of its earnings.
    2. Yes its current business is argued risky and a business expansion would serve it well in mitigating this risk to some extent.
    3. As of today yes of course they wouldn't thats what I wrote/explained in the first sentence of A), but I am speculating about the future aint I? What I was writing clearly was that only in the case in the scenario of a breakdown of its business would it consider this and in this case the current value would not depict the future value of the assets.

    I interpret as you pulled out some statements of my article and did not read the following and/or previous sentences which of course means you wouldnt understand the context.

    Also this should not be considered as a holistic and final analysis at all just an analysis focusing primarily on one part of this company.

    Noted the disclosure, thank you
    Jan 30 06:10 AM | Likes Like |Link to Comment
  • Why Oppenheimer Holdings Does Not Have Any Discount Today [View article]
    @Matt62 I am not surprised and a excellent observation by you! This information strengthens the investment thesis outlined above.
    Jan 22 01:40 PM | Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Please read from this link Page 10. So the two rigs are operating some 711K today. I was writing about Awilco's total rate(rig1+rig2). You just have to read the IS and CF statement to check whether I am "way,way off".
    Can be read on the following link page 5 and 7.

    Again for me the 10K difference will not change the investment case. And as I explained to you the contracts suggest that Awilco's rate will be higher than the average total rate I have calculated above. Btw 10K*365 = 3.65 million per rig so maximum 7.3 M USD not 7.5 million if 100 % utilization which is far too optimistic. Hope that solves it for you
    Nov 21 02:57 PM | Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Hey Lynn Dog, interesting company a first glance seems like it requires large amount of capex, dilution spree and debt is not so promising for a aggressive expansion programme.

    I've been investing in canadian oil companies and might when time allows write a article about the case I have which may fall in your interest.
    Nov 19 07:08 PM | Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Insurance are set to a maximum amount of 260 million per rig in the unlikely event of that the drilling rigs more or less explodes.

    Loss of hire insurance at 303000 per day for maximum 120 days starting after 45 days of off hire(assumed that it covers both rigs if they go offline simultaneously).

    The terms are good and inline with industry standards. Extreme events like a blowout are very rare. Also mitigated because of the high standards that are followed in the UKCS, rig quality and management detail oriented approach.
    Nov 19 07:00 PM | Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Inaccurate metrics? My estimate not actual number is conservative if you look for the earnings for one year ahead. Some 10K will not change the investment case. It would be misleading to base the case on previous quarters rates and then extrapolate these, as contracts rates are in fact rising the coming year.

    Yes downtime is probably the most evident and probable problem for Awilco, but is limited and especially longer downtime due to responsible and efficient management and rising rates(which I deem are sustainable, read my last comments for further explanation) which compensates to a degree some downtime.
    Nov 19 06:36 PM | Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Yes not often at all you encounter this rare "specie", fortunate to come in contact. I'll have a look at AMNF when I've time
    Nov 19 06:25 PM | Likes Like |Link to Comment
  • Intel - Can McAfee Sustain Its Long-Term Value To Shareholders Through Acquisitions? [View article]
    Justalongfortheride, interesting, are those the forecasted values or actual?
    Values which I took come from here:

    @krh007 Yes interesting but they also need to gain some market serious market share in the smartphone market before they can achieve any worthwhile scale in what you are proposing. I am not sure whether it can attract more customers on that sole basis, depends really on how the smartphone virus market develops and the suitability of intel's security solution
    Nov 19 06:22 PM | Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Dayrates are very near 685K for both rigs on a annual basis. It is a conservative average estimate for both rigs the coming year. The coming quarters it these will run at 711 K(beginning in q4) as to compared this quarter 675 K which is a 2.5 M increase per quarter.
    Yes but its remaining life for the rigs is not 15 years it is 18 years.

    Yes but the probability of such events happening I can live with.

    How do you know its the end of the cycle? As you said no one really knows exactly. But the favorable drilling will likely to continue as the government is effectively sinking the tax and smaller/larger companies are entering it to prospect. There is the oil price risk here.There is also the perception of the oil companies active in the UKCS that this is a politically safe region to operate and/or risk diversification.
    As I wrote in my last comment the company sits in a favorable supply situation and will be in this chair for quite a while considering that any company must meet strict UK standards which includes the mobilization costs of at least 150 M USD, then there is initial downtime, possible cost of releasing contract, contract seeking, regulatory approval time etc.

    I think people tend to forget that this management/owners is not ordinary management/owner either. These people will apply aggressive acquisitions in times when people are in fear. So in the future I would believe you would see another acquisition of a similar type.

    But the fine thing is that even if the company drops to 600 K a year the company will still make around 25-27 Million at 97 % revenue efficiency and adjusted for CAPEX and Depreciation. That is still a 16 % yield. It dropped to 250 K a day during the GFC for those who are interested. But reality by looking its actual contracts is that its rates will increase not decrease the coming years, starting from Q4 alone the increase will be 2.5 M a quarter. Wii hunter will be employed to late 2015 and with options for extension and wiiphoenix to mid 2017 with a 27 month extension. Opex is expected to be higher from 2014 some 40K but will be more then compensated by increased rates and/or decreasing interest expenses. Starting late 2014 the company will run at 770 K per day. At that point the dividend will likely be around 170M. This will obviously pay for the SPS in 2016 with the associated downtime of the rigs with respect to Wilhunter having a contract.
    There is a asymmetry in the price 4-5 years payback in dividends alone means a 200 % return including SPS, then lets say for margin purposes to have a extra year dedicated for a 3 month downtime for every consecutive 4 years. Obviously you have another 13-14 years of rig time left at that point. In 2014 November the value with no appreciation will be around 510 M.....When it starts producing earnings of some 190 M. For me the value is clear. I have bought in tranches for a longer while and will not release my shares anytime soon. Even at 250-300K(GFC level) per rig a year it will be a good case.

    About that it only operates two rigs I can live with as management also gets more focused rather than having to control 10 rigs. Rather two well operated rigs than 10 rigs operated in a mediocre fashion. As previously noted, I also expect management to increase its fleet in the next GFC =).
    Nov 14 06:24 AM | 2 Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    Hi there Gordon Z. Lets get some history first as your questions are very much of history nature. So what this tells us is that OFT(Office Of Fair Trading) merger between Transocean and Globalsantafe was deemed to decrease the competitive nature in the UKCS.
    The merger and the anticipated consequences of it was the primary reason for the sale. Officially the OFT did not seem to give a specific time point of the actual happening of the divestment. The company naturally decided to continue to operates its rigs as the rates was decent. Transocean was deemed to undertake the sale of its rigs though, awilco was approved in advance by the OFT by passing all its standards(technical,op... capital etc) which paved the way for a suitable buyer. But it wasn't the first and final buyer. This might have been a substantial process and a key reason why it took a while, which was both bad and good for Transocean. But processes was still ongoing and finally in the end of july 2008 these two rigs were going to be sold for 750 M USD(For those who are interested in asset values, which I would argue is not the reason to invest in this company, the mcap adjusted by net interest bearing debt would be some 690 M) to northern offshore(NO). ( However shortly after the fantastic equity bubble burst which lead to the subsequent denial of the loan that transocean was to give to NO. The reason being because of the lack of demand of rigs because of oil prices collapse, company restraining its expenditures etc caused by GFC the rates dropped considerable for the companies willing to offer its services. Can be witnessed on slide 21

    Transocean was probably worried at that time, it also had the pressure of OFT in the back of its head.
    It(Transocean) needed to get its rigs gone. Not only that expenses was significant to get both rigs operational over 215 M USD(slide 6) limited the potential buyers. But it does not end here, to get the rigs operational the buyer had to set in another 90M USD excluding working capital and administrative costs. Still a great price for a fire sale and obviously the money would pay back in quickly in a better market which I deem is likely to continue unless we have another significant equity bubble in the coming year.

    You have to remember that the reason why other companies did not take the chance was because they were worried that the rates at that time were to exist on a longer run. But there was not much to worry about in terms of UKCS large and politically safe assets and a highly regulated environment which would essentially limit competition. On a serious side note, any company today wanting to go in the UK market must meet all UK standards and its initial mobilization costs of rigs of some 150M USD is not so attractive for most companies that have newer rigs and bound decent long term contracts. And then there is contract establishment time, rigs don't come cheap, downtime etc...
    Secondly most companies did not have significant cash and were in the process of cutting down expenses extensively. So naturally it would be few companies that would have the ability to acquire these rigs. Left are those who have the ability but perhaps more importantly see the potential in the crisis, like awilco. With the ownership and associated management this should not be a surprise why they bought it. I expect in the future that Awilco would if not bought out by a major would do the same thing once again, perhaps in another market even. This is also a reason why I own Awilco because the ownership and management is excellent in executing rather than talking.

    I hope I got the majority of your questions in the answer
    Nov 9 06:03 PM | 2 Likes Like |Link to Comment
  • Awilco Is Ready For Substantial Earnings And Dividend Boost [View article]
    @Ultrarun I hope so.

    @ Sikland Glad you enjoyed it

    @ Gravity404 Yes you are right I skewed it slightly by 10k per day mainly because the average rate the coming year will most likely be larger than todays actual rate of 675 K per day which would skew it negatively. Q4 and 2/3 of Q1(2014) will run at 711K per day.
    You can find it here on slide 10
    Nov 8 02:52 PM | 1 Like Like |Link to Comment
  • Awilco Drilling Is The World's Most Undervalued Company [View article]
    Harry you seem aggressive on your choice of heading but for a good reason. Its finally getting some appreciation it so rightfully deserves. Actually it will be interesting to see if the company marks up its dividend by 4q with 10 % of its current div. rate as the 36 k increase in rates from oct should mean 10-11 M using its historical utilization rates. That would mean some 4.4 dollar in dividend per year. Moreover, the company has left after dividends distributed some extra 10-15 M which it can build its already nice pile of cash.
    But 5 dollar per share dividend does not seem out of the question when its full rates are utilized.

    That would motivate a share price between 35-40 dollar per share in conservative terms. Time will tell
    Oct 25 11:49 AM | Likes Like |Link to Comment
  • Intel: Its New Ivy Bridge Positions The Company For Margin Increase And Growth [View article]
    @Robert Mcdonald well said. It does feel like Intel has realized to some extent of the margin hunting with its R&D and Capex soaring but that would not necessarily mean it would focus its business on the right things either, but its a good first step for transitioning.

    @User 7757181 You are spot on and I believe the willingness and ability to optimize software for hardware might be a problem that we will see for a good while until programmers can properly capitalize on this opportunity on a relatively short time frame.

    Why shouldn't I be? Thats whats currently selling on the marketplace. And regarding the mobile segment why should I mention something that I don't intend and have not discussed? Thats worth a entire separate article.
    Oct 6 05:46 PM | 1 Like Like |Link to Comment