2-cents's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/171398/comments http://seekingalpha.com/article/104247-oil-analysts-down-for-the-count?source=feed#comment-298928 298928 ]]> Wed, 05 Nov 2008 16:37:56 -0500 ]]> http://seekingalpha.com/article/102545-world-oil-supplies-declining-faster-than-expected-iea?source=feed#comment-293194 293194 Public transport - no money which all used to bail out the bankers
Fuel efficient cars - GM, Ford etc are facing chapter 11 let alone invest in technology.
I suggest walking and wearing more cloths in winter
]]> Wed, 29 Oct 2008 01:59:50 -0400 Public transport - no money which all used to bail out the bankers
Fuel efficient cars - GM, Ford etc are facing chapter 11 let alone invest in technology.
I suggest walking and wearing more cloths in winter
]]> http://seekingalpha.com/article/96791-interdependence-and-this-crisis?source=feed#comment-262027 262027 Mon, 22 Sep 2008 21:08:21 -0400 http://seekingalpha.com/article/96738-fed-bailout-will-create-weaker-dollar-higher-commodity-prices?source=feed#comment-262025 262025 Mon, 22 Sep 2008 21:04:34 -0400 http://seekingalpha.com/article/95949-analyst-oil-prices-inflated-by-50?source=feed#comment-257658 257658 Thu, 18 Sep 2008 02:04:12 -0400 http://seekingalpha.com/article/95511-demand-for-oil-starts-to-falter?source=feed#comment-255367 255367 Mon, 15 Sep 2008 19:30:57 -0400 http://seekingalpha.com/article/94952-gold-hammered-oil-slicked-is-this-the-end-of-the-resource-boom?source=feed#comment-251219 251219 Thu, 11 Sep 2008 03:17:26 -0400 http://seekingalpha.com/article/94554-strong-fundamentals-and-oil-ties-make-transocean-a-great-long-term-buy?source=feed#comment-249927 249927 1) If the price of oil drops to X ($80, $60, $40) at what point do RIG's contracted day rates, and thus revenue, adjust per the terms of their contracts? Has anyone analyzed this?
Their contracts are not cancellable. A lesson learnt from previous down turns. Most new contracts have cost escalation clauses meaning costs will be passed to oil companies.

2) If their revenue drops, as the first question ponders, then at what oil price would they be unable to service their debt?
Current backlog is $40.7 billion which will leave almost $10 bn in spare after paying back all debts. You need to worry about what they are going to do with the cash flooding in.

3) Has anyone considered the risks of non-payment or contract abandonment by RIG's customers if oil prices continue to plummet towards historical means?
See No1.
OPEC is defending $100 oil (a level that got passed just this April) whereas Petrobras is contracting all deepwater rigs it can find for the next 10 years. Their projects require $100-$115 oil to be sustainable. Do you think they go ahead if they think oil will be at $80, $60 a barrel?]]> Tue, 09 Sep 2008 22:51:49 -0400 1) If the price of oil drops to X ($80, $60, $40) at what point do RIG's contracted day rates, and thus revenue, adjust per the terms of their contracts? Has anyone analyzed this?
Their contracts are not cancellable. A lesson learnt from previous down turns. Most new contracts have cost escalation clauses meaning costs will be passed to oil companies.

2) If their revenue drops, as the first question ponders, then at what oil price would they be unable to service their debt?
Current backlog is $40.7 billion which will leave almost $10 bn in spare after paying back all debts. You need to worry about what they are going to do with the cash flooding in.

3) Has anyone considered the risks of non-payment or contract abandonment by RIG's customers if oil prices continue to plummet towards historical means?
See No1.
OPEC is defending $100 oil (a level that got passed just this April) whereas Petrobras is contracting all deepwater rigs it can find for the next 10 years. Their projects require $100-$115 oil to be sustainable. Do you think they go ahead if they think oil will be at $80, $60 a barrel?]]> http://seekingalpha.com/article/94537-remember-those-200-oil-predictions?source=feed#comment-249847 249847 Tue, 09 Sep 2008 19:14:31 -0400 http://seekingalpha.com/article/94273-ospraie-s-poor-portfolio-weighting-xto-contributes-major-loss-to-fund?source=feed#comment-248044 248044 Mon, 08 Sep 2008 06:15:56 -0400 http://seekingalpha.com/article/88555-crude-reality-big-oil-s-purposely-restricting-supply?source=feed#comment-219933 219933 Fri, 01 Aug 2008 07:55:37 -0400 http://seekingalpha.com/article/87009-memc-electronic-glass-half-empty-or-half-full?source=feed#comment-216242 216242 Mon, 28 Jul 2008 06:58:31 -0400 http://seekingalpha.com/article/85360-uso-breaks-upward-trendlinefinally?source=feed#comment-207452 207452 Thu, 17 Jul 2008 03:04:29 -0400 http://seekingalpha.com/article/82578-all-of-the-motor-fuel-alternatives-to-conventional-crude-oil-stink?source=feed#comment-193665 193665 Thu, 26 Jun 2008 16:57:19 -0400 http://seekingalpha.com/article/82578-all-of-the-motor-fuel-alternatives-to-conventional-crude-oil-stink?source=feed#comment-192374 192374 Wed, 25 Jun 2008 05:10:24 -0400 http://seekingalpha.com/article/82102-china-cuts-subsidies-is-a-pullback-in-oil-next?source=feed#comment-188946 188946 Fri, 20 Jun 2008 07:16:53 -0400 http://seekingalpha.com/article/80760-transocean-drilling-for-profits?source=feed#comment-183179 183179 Be patient! I am a long term holder of offshore drillers. Take Ensco for example, it was on Merrill Lynch's Conviction Sell and was lagging RIG for almost a year, but fundamentals prevailed. It is one of the cheapest with strongest balance sheet amongst drillers. RIG is now dirt cheap considering very solid backlog at $34 billion. The latest June operations report showed considerable jumped in two contract rates.
Be patient. Not many companies have such tail wind.]]> Wed, 11 Jun 2008 08:33:25 -0400 Be patient! I am a long term holder of offshore drillers. Take Ensco for example, it was on Merrill Lynch's Conviction Sell and was lagging RIG for almost a year, but fundamentals prevailed. It is one of the cheapest with strongest balance sheet amongst drillers. RIG is now dirt cheap considering very solid backlog at $34 billion. The latest June operations report showed considerable jumped in two contract rates.
Be patient. Not many companies have such tail wind.]]> http://seekingalpha.com/article/80635-oil-s-sixth-largest-point-drop?source=feed#comment-182254 182254 Tue, 10 Jun 2008 04:13:53 -0400 http://seekingalpha.com/article/80536-125-oil-not-sustainable-for-the-time-being?source=feed#comment-181486 181486 Sun, 08 Jun 2008 17:30:15 -0400 http://seekingalpha.com/article/79383-now-shortages-of-natural-gas?source=feed#comment-178394 178394 Wall Street analysts fell over each other to down grade natural gas producers and the gas-levered oilfield services companies. Not very long ago!!!!!
Both oil and gas are produced as Just-In-Time products, thanks to Wall Street. One hurricane hitting the Gulf of Mexico, prices would look very cheap now.
]]> Tue, 03 Jun 2008 07:30:08 -0400 Wall Street analysts fell over each other to down grade natural gas producers and the gas-levered oilfield services companies. Not very long ago!!!!!
Both oil and gas are produced as Just-In-Time products, thanks to Wall Street. One hurricane hitting the Gulf of Mexico, prices would look very cheap now.
]]> http://seekingalpha.com/article/79132-perfect-oil-storm-brewing-in-the-u-s?source=feed#comment-175603 175603 Wed, 28 May 2008 20:00:21 -0400 http://seekingalpha.com/article/77008-energy-sector-is-approaching-negative-seasonality?source=feed#comment-166678 166678 Tue, 13 May 2008 07:36:33 -0400 http://seekingalpha.com/article/74319-googles-earnings-expose-wall-streets-limitations?source=feed#comment-157778 157778 Me too, I think Wall Street analysts are a bunch of idiots but I am not complaining because they create HUGE opportunities, all the time. So if one can avoid the herding mentality, he/she can make money in the markets.]]> Mon, 28 Apr 2008 06:36:32 -0400 Me too, I think Wall Street analysts are a bunch of idiots but I am not complaining because they create HUGE opportunities, all the time. So if one can avoid the herding mentality, he/she can make money in the markets.]]> http://seekingalpha.com/article/73993-t-boone-pickens-predicts-125-barrel-oil?source=feed#comment-156422 156422 Fri, 25 Apr 2008 08:48:23 -0400 http://seekingalpha.com/article/73515-oil-pricing-upside-risks-and-downside-drivers?source=feed#comment-155069 155069 Wed, 23 Apr 2008 05:42:47 -0400 http://seekingalpha.com/article/71618-commodity-forecasters-see-prices-declining?source=feed#comment-147235 147235 Tue, 08 Apr 2008 17:58:14 -0400 http://seekingalpha.com/article/70785-oil-demand-does-not-have-to-cause-higher-prices?source=feed#comment-134893 134893 Tue, 01 Apr 2008 20:48:30 -0400