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  • Time to sell drillers as Petrobras cuts rig rates, analyst says [View news story]
    PBR put contract re-negotiations on hold with Diamond, Seadrill and other contractors in recent months, following negative trends in charter rates, utilization, and fear of oversupply during 1H14. The negotiations from late 2013/early 2014 were at rates far above present market. As such, Petrobras laid the talks to rest with the drilling contractors over the summer, in order to re-submit the requirement and accept bids that reflect today's market. It's not that Petrobras SET the rates, they merely have leverage to push the rates down, as all drillers are facing increasing challenges going forward.

    Similar drops in charter rates are evident in Mexico, where PEMEX in 2013 signed up a semi for at ~210K/day, while in early 2014, PEMEX hired a similar, nearly identical rig for ~170K/day.
    Aug 20, 2014. 12:25 PM | 1 Like Like |Link to Comment
  • Rowan Companies: Move Into Deepwater Could Mean Big Profits [View article]
    I believe you have a miscalculation in there.

    'Therefore, the rig can be expected to earn about 90% of its maximum potential contract revenue. This would equate to approximately $200 million annually per rig.' - ????

    $610,000 avg. day rate (on each drillship)
    - $185,400 ($180,000 + 3% for inflation, etc.)
    = $424,600/day pre-tax revenue, gross

    Gross pre-tax revenue per drillship, annually;
    $424,600 x 365 = $154,979,000

    Assume 90% utilization (prior to calculating tax, as tax is based on revenue and there is no revenue on down time);
    $154,979,000 x 90% = $139,481,100 Gross pre-tax revenue per drillship, annually

    Total Annual Tax per Drillships (assume 4% tax)
    $139,481,100 x 4% = $5,579,244

    After-tax Revenue Per Drillship:
    $139,481,100 - $5,579,244 = $133,901,856
    Jul 17, 2013. 08:47 PM | Likes Like |Link to Comment
  • North Atlantic Drilling: A Hidden, Undervalued Offshore Driller With 2 Upward Catalysts [View article]
    My concern with North Atlantic Drilling is directly related to their fleet. As of late, O&G corporations have shown an increased appetite for newer generation semisubs and drillships. Beyond the end of their respective contracts, I'm worried that the NADLs 4th and 5th gen semisubs will either not get an immediate contract renewal, or if they do, it'll be at a significant discount compared to their current rates.

    The DW/UDW market is seeing more bifurcation, where day rates for high-spec UDW rigs and drillships see steady to moderate increases in rates in the 575-625K/day range, while lesser-spec rigs rates are softening up. A recent example of this is the 1999-built Ensco DS2 drillship that got a 12 month contract in the 430Ks/day.
    Jul 17, 2013. 08:09 PM | Likes Like |Link to Comment
  • Netflix To Premiere DreamWorks Animation's Branded Slate Of New Original TV Series [View article]
    If Netflix subscribers in the US were aware of the superb movie/TV show selection in Mexico and Norway (two countries I recently visited), versus the extremely lackluster selection here in the US, Netflix would/should plummet. We are definitely getting the short-end of the stick here in the US.
    Jun 17, 2013. 11:41 AM | Likes Like |Link to Comment
  • These 6 Companies Cannot Support Their Dividends [View article]
    With 19 high spec'd rigs coming out of construction yards between now and 2016, SDRL's fleet will grow by 50%. SDRL has a history of securing the highest day rates in all rig segments, and with the highest spec'd fleet of all drillers (Jackups, Semisubs and Drillships, incl.) all of their newbuilds get long-term contracts prior to completion. Extensive backlog and a significant EBITDA growth within the next two years makes me feel confident that the dividend will continue as is.
    Jun 13, 2013. 03:24 PM | 7 Likes Like |Link to Comment