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Not_Quite_Pheidippides

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  • Chevron's Push In Argentina's Vaca Muerta Shale [View article]
    So we know the spending levels in dollars, but does anyone know what the revenue structure is like -- do they have to sell the gas and oil in pesos, or some fraction, or is it all pegged to the dollar? If it all goes to domestic use (and that seems to be the state's priority), revenue could be weak if the peso is too.
    Apr 22 09:28 AM | 1 Like Like |Link to Comment
  • Seadrill Part 2: New Jackup Contracts Promise Revenue Growth And Improve Forward Earnings Visibility [View article]
    ...and now the Sevan Louisiana is about to start bringing in cash, too. What a funny looking rig.
    http://bit.ly/1ijX37b
    Apr 14 10:35 PM | 1 Like Like |Link to Comment
  • Seadrill Part 2: New Jackup Contracts Promise Revenue Growth And Improve Forward Earnings Visibility [View article]
    And now, Total & JV partners just made a $16 billion all-in decision on offshore Angola. No info regarding rig counts, etc., but they're talking about 59 wells circa 1400 - 1900 m depth to support two FPSOs. You can't do that with a couple of jack-ups...

    Info:
    http://bit.ly/1t0ZHDq
    Apr 14 01:15 PM | 1 Like Like |Link to Comment
  • Buy Teekay LNG Partners For LNG Growth And 6.4% Yield [View article]
    Excellent explanation; thank you for taking the time to spell that out for everyone. I don't know what TGP's tiers are offhand, either, but if I dig them up I will be sure to share.

    My strategy with TGP here is to keep my allocation there until there's more clarity about large LNG projects coming online, then consider jumping to a "riskier" play like GLNG. It seems like there has been a lot of concern in the short term about project delays and timing offsets between ships hitting the water and the demand for LNG shipping. Of course, if I miss the timing it's a rotten plan. In the meanwhile, though, I've been dripping the distributions and my effective payout just keeps getting better. Maybe in 2 years that'll be more than enough for me, but still -- the IDRs and all that cash flowing to the parent bother me.
    Apr 14 01:05 PM | Likes Like |Link to Comment
  • Seadrill sinks as Credit Suisse downgrades, cuts target to $30 from $40 [View news story]
    Excuse me, not 1Q earnings -- getting ahead of myself. 4Q2013 earnings release.
    Apr 11 11:14 AM | 2 Likes Like |Link to Comment
  • Seadrill sinks as Credit Suisse downgrades, cuts target to $30 from $40 [View news story]
    West Carina is also slated for delivery in 4Q2014.
    Apr 11 10:57 AM | Likes Like |Link to Comment
  • Seadrill sinks as Credit Suisse downgrades, cuts target to $30 from $40 [View news story]
    Half full / half empty... they seem to be completely fixated on the drillships coming out of the yards this year that they haven't yet announced contracts for. West Saturn and West Jupiter are slated for delivery in 2Q and 3Q, respectively. And... no news! Run for the hills!

    They did state in 1Q earnings that, "Seadrill is making progress in contract discussion for the West Saturn and West Jupiter and expects the units to commence attractive medium to long term contracts immediately after delivery from the yard. Order backlog excluding the Saturn and Jupiter discussions currently stands at US$20.2 billion." If you know when those discussions will be concluded and announced, you could probably make bank on the options plays. Sans ESP, unfortunately, I will just buy regular shares.
    Apr 11 10:56 AM | 1 Like Like |Link to Comment
  • Seadrill sells SapuraKencana stake, raises $300M in proceeds [View news story]
    Since the tender rig deal (Nov. 2012 was the first announcement), SapuraKencana is up over 1/3 (from about 3 to well over 4 [ringitt? Looking at yahoo finance] -- depends on the exact timing of the sale). In net, then, the value of their SK stock is now roughly the same. So, they're A) profit taking, B) keeping the value of their investment in SK proportional, and C) getting cash for ???...
    Apr 9 12:33 PM | Likes Like |Link to Comment
  • Buy Teekay LNG Partners For LNG Growth And 6.4% Yield [View article]
    I've been long TGP for 2 years, and I'm happy to see The Outsider bring some attention to the company. TGP has a lot going for it, including the long-term, conservative nature of their business which this article nicely highlights. If the predicted mismatch between newbuilds hitting the water and LNG projects being completed does happen as forecast, TGP will be fine while indebted companies which are more susceptible to spot rates will struggle. Their conservative nature, however, does mean that they are less competitive in bidding on contracts, such as FSRU projects -- they've nibbled, but never closed a deal there, that I am aware of. If I'm wrong, someone please correct me.

    However, there are two aspects to TGP that also need to be considered. First: while EBITDA and / or DCF growth are great, as per many LPs TGP has been issuing new units to cover expansion costs. Consequently, even during this great growth period and the addition of the Exmar JV, the actual impact over the last 24 months on individual units has been a single distribution raise of less than 2 cents. From a unitholder's perspective, it's a Red Queen situation (running hard but staying in the same place). Why would they do this? Second point: like many LPs, the general partner (Teekay Corporation) holds incentive distribution rights. TGP issues new units, expands the business, and increases the cash flow to the GP.

    I believe that TGP has some good years ahead of it, and hopefully increasing distributions, but it would be nice to see some discussion of dilution and IDRs.

    Finally, TGP does not operate the vessels -- the charterer does -- and so increased fuel efficiencies do not impact their bottom line directly. More fuel efficient ships are more attractive and can garner higher dayrates, but to state that TGP itself will save money on fuel is not correct. That is my understanding, at least.
    Apr 7 01:54 PM | 1 Like Like |Link to Comment
  • 5 Best Offshore Driller Stocks To Buy While They Are Still Cheap [View article]
    Correction -- regarding the Noble Danny Adkins, the stated water depth is impossible. The deepest place in the Gulf of Mexico is circa 4000m, or roughly 13,000 feet. To get to "water depths of up to 35,000 feet", you have to be either over the Marianas trench or the Tonga trench.
    Mar 27 10:24 AM | 1 Like Like |Link to Comment
  • Rentech Nitrogen Partners, L.P. Achieves Key Operational Milestones at Pasadena Facility [View article]
    I'll be curious to see if / how this affects their AS margins. 20% more volume with no margin does not add to cash flow. On the other hand, if fixed costs don't change much but they move a lot more product, they might finally boost margins at Pasadena such that it materially contributes to the distribution. That would be nice, but I'm not going to bank on it.
    Mar 3 02:09 PM | Likes Like |Link to Comment
  • Inter Pipeline Ltd.: Long-Term Oil Sands Transport Contracts Will Drive EBITDA And Dividend Growth [View article]
    Hi Michael -- nice article, and I really appreciate the new information. This is much better than hearing about some hot stock over and over again (not a dig on you!). Please do let us know about the IRA & foreign taxes. Inter Pipeline does state that they think you should not have anything with held, but at the same time, of course, they are not tax advisors. I'm thinking about adding this to either IRA or regular brokerage... wonder if the tax issue is broker specific?
    Feb 26 07:33 PM | 1 Like Like |Link to Comment
  • Seadrill: An Attractive 10% Yielder [View article]
    DivLA, I have to say, it seems like some (most) of the early, story-sculpting headlines were written ahead of time, and the relevant points forced to match (or not). When you see a crazy headline followed by deets that don't match, well, it's pretty obvious.
    Feb 25 09:23 PM | Likes Like |Link to Comment
  • Seadrill: An Attractive 10% Yielder [View article]
    Well, now, this is interesting -- I'm reading the comments about Archer. Seadrill has 231 million shares of Archer. After Archer's goodwill impairment, Seadrill reduced their book value to reflect this change. Now, "Following the write down of goodwill and other long lived assets, the book value of Seadrill’s investment in Archer is US$8 million." So that's what's on the books. Only... at the current price of NOK 7.30 per share for Archer, or $1.21 per share, Seadrill's 231 million shares would be actually be worth about 277 million USD. That's a lot more than $8 million. This is biting them pretty hard now, but in the future they could book some serious gains here. Could be a nice setup.

    Follow-up on previous comment: the Archer impairment (non-cash) of $185M translates to ~39 cents per share. That alone turns into a miss (~0.49 cents / share) what would otherwise have been a solid beat (~0.88 cents / share), not including other financial items. I have 0.77 cents as average analyst expectations. If any of this is off, please correct.
    Feb 25 09:48 AM | 2 Likes Like |Link to Comment
  • Seadrill: An Attractive 10% Yielder [View article]
    The EPS "miss" was due to non-cash financial events -- namely, the stock they hold in Archer. (Archer themselves had a goodwill impairment.) It's mark-to-market, i.e. an unrealized loss, but they still have to report it. Exclude that and you would have had a beat, I believe.

    Ironically, since the new year Archer stock has done quite well -- up 47%.
    Feb 25 08:12 AM | Likes Like |Link to Comment
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121 Comments
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