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31October

31October
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  • Why Ensco's 10% Dividend Is Built To Last [View article]
    They are correct to have that fear. Currency pressures will compound drillers' problem.
    The EU and BoJ have decided to stimulate their economies by devaluing their currencies. ("Hasn't worked so far, so let's quadruple-down!"-- Japan. "Didn't work for Japan, let's copy it!"-- Europe.) Oil is traded in dollars. The dollar's strength relative to the yen & euro means that a barrel of oil will sell for less dollars, which multiplies the supply & demand that has already been pushing the price point down.
    Feb 26, 2015. 03:22 PM | Likes Like |Link to Comment
  • Seadrill: First Takeaways From Q4 Report [View article]
    This is the most important part:
    "The company is sure their current contract terms are enforceable but may be willing to negotiate a mutually beneficial renegotiation if positive for SDRL"
    Longer term, the industry will be forced to scrap older units and that will accelerate to scrapping levels not seen in 20 years"
    SDRL has a number of global factors going against it, and they will have to accept lower rates to keep enough business to cover fixed costs. That is not as bad as it sounds-- Some small companies and some with old rigs will go bankrupt. SDRL just has to keep rates high enough to cover their overhead until then.
    Feb 26, 2015. 02:50 PM | Likes Like |Link to Comment
  • Seadrill EPS of $0.32 [View news story]
    Off course not. Their buyback comment was an empty statement, about a possible theoretical option, to cushion the blow from suspending the dividend. It would make little sense to buy back stock, when the purpose was to shore up the balance sheet.
    Feb 26, 2015. 02:38 PM | Likes Like |Link to Comment
  • Why Ensco's 10% Dividend Is Built To Last [View article]
    Ensco does not need to sponsor a DRIP program, because every broker does.
    Feb 24, 2015. 09:47 AM | Likes Like |Link to Comment
  • Seadrill Is Not Yet Out Of The Woods [View article]
    SDRL has debt payments due Oct 2015 and Sept 2016. They will be competing for contract renewals at a bad time. This will be a rough ride down.
    Feb 23, 2015. 10:56 AM | Likes Like |Link to Comment
  • Seadrill Even Leads Sector In Capital Distribution Plans [View article]
    "What are they to do with the savings produced from cancelling the dividend?"
    SDRL has large debt payments coming due in fall of 2015 and 2016. I also expect new contracts to be less profitable. They will probably just hoard the money until crude prices stabilize. They could also buy VTG or PACD if they go bankrupt, but I hope not.
    Feb 21, 2015. 10:21 AM | 1 Like Like |Link to Comment
  • Seadrill Even Leads Sector In Capital Distribution Plans [View article]
    wigit5, SDRL was hit harder than all other drillers because of debt, so how is it sensible or logical to conclude that reduced cash flow in the face of a big payment will drive stock price up?
    SFC, people said that debt was a known issue before it went from $40/share to $10. Low crude price leverages their debt load problem. There is nothing that points to crude prices shooting up any time soon, Saudi Arabia has no incentive to cut production at May's OPEC meeting, plus oil is being stored in tankers, keeping oil prices down even if there were an unlikely cut in OPEC production.
    I hope that I am wrong and that you are right, but I see no evidence that its stock price will shoot back up anytime soon. I would not be surprised if it went below $10 again in October.
    Feb 21, 2015. 10:12 AM | 1 Like Like |Link to Comment
  • Seadrill Even Leads Sector In Capital Distribution Plans [View article]
    SDRL is about to lose some expected revenue as its October debt payment comes due http://seekingalpha.co..., at the same time that crude prices will still be down (unless there is a big geopolitical event, and that is very possible), just as contracts are renegotiated, and they have another payment due September 2016, around the same time competitors take delivery of comparably new rigs. Oil majors know that SDRL must maintain maximum asset utilization at any price to cover fixed costs, and contracts will be renegotiated to capitalize on that weakness.
    Like Heidi Kitty, I see no significant advantages before 2017. I have a shite-tonne (that there is a real fancy CFP term) of SDRL and keep looking for good news... Still looking...
    Feb 19, 2015. 08:13 PM | 1 Like Like |Link to Comment
  • Analyzing The Impact Of The Petrobras Contract Cancellations On Seadrill's Cash Flow [View article]
    Losing 10% of their cash flow at the same time their October 2015 debt payment comes due is an uncomfortable situation.
    Feb 19, 2015. 01:20 PM | 4 Likes Like |Link to Comment
  • Ensco Plc: Complete Fleet Status Analysis On February 17, 2015 [View article]
    ESV should completely suspend the dividend, then accrue cash to purchase a bankrupt competitor next year... If no company worth buying goes bankrupt, then buy back many shares right before reinstating the dividend.
    Feb 18, 2015. 04:13 PM | 1 Like Like |Link to Comment
  • Seadrill: Is It Finally Time To Start Buying? [View article]
    "Would not be surprised to see JF sell more st0ck, that is about all he can do."
    Apparently that is not all he can do, since he can also twice increase his holdings, now at 119,097,583 shares. http://bit.ly/1E6T4G7
    and
    http://bloom.bg/1E6T60C
    Feb 18, 2015. 04:03 PM | 3 Likes Like |Link to Comment
  • Seadrill: Is It Finally Time To Start Buying? [View article]
    This has been answered many times on many threads. The dividend will resume either when...
    1- The price of crude stabilizes at a price above UDW breakeven, competitors have stacked their older rigs, global supply has dropped below demand, AND free cash flow is positive (including enough to cover the debt payments due October 2015 and September 2016), or...
    2- Not any time soon.
    Feb 18, 2015. 11:24 AM | Likes Like |Link to Comment
  • Buy These 5 Small-Cap Oil Stocks With Low Debt Levels [View article]
    "I don't recall the use of the words evil, traitor, Emperor etc when a Republican was President!"
    Non sequitar to the article, to not remember those words would require an extremely selective memory, Obama's policies are merely an expanded variation of Bush's policies, and that fact that you do not realize that there is no difference says a lot.
    Feb 17, 2015. 12:00 PM | Likes Like |Link to Comment
  • After Rebalancing, CEFL February Dividend Will Bring Yield To 18.8% [View article]
    You are correct. Banks have higher reserve requirements than they used to, (although Congress might repeal that.) Also, there is lower productivity and lower workforce participation rates. There is a lot of latent inflation (water) behind that uncirculating virtual money (dam.)
    The government has itself in a pickle, because Americans have been encouraged to buy, buy, buy on credit; so to increase rates would cause another string of bankruptcies. Starting another wave of defaults while in a period of trade and balance deficits, low productivity, and low (real) employment, plus higher barriers to starting a small business (we have 2; just trust me on this) means a true depression next time.
    Feb 15, 2015. 09:04 AM | 1 Like Like |Link to Comment
  • After Rebalancing, CEFL February Dividend Will Bring Yield To 18.8% [View article]
    The Fed controls the current prime rate, the federal funds rate, and the discount rate. Increasing the funds rate just brings in more megabank reserves to support the system of printing. China, the biggest foreign investor in U.S. government bonds, cut its holdings. The Federal Reserve increased the reserves rate as an incentive to increase the reserves on hand for themselves-- to shore up the national balance sheet (which is in poor condition) and to increase money supply:
    Fed assets are 98% IOUs, mostly t-bonds. Savers are necessary for the loan market to exist. That is why the Fed became a buyer in the bond market, adding trillions to the money supply, they can push interest rates lower with every new round of Treasury purchases. Every time the Fed buys a bond, it is allowed to use that same T-bond as collateral to back more Federal Reserve Notes, which are then used to buy more bonds. http://bit.ly/1FOwX68 This sort of monetary scheme can work very well for a while without collapsing the dollar, but it cannot work for long without devaluing the dollar. Since the CBO says that the dollar must be devalued 33-40% to pay future entitlements, then it seems logical that devaluation is the goal.
    Feb 15, 2015. 08:55 AM | 1 Like Like |Link to Comment
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