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  • Seadrill - A Solid Gamble On Oil Prices [View article]
    Well for one thing conventional oil fields usually suffer normal production declines in the range of 5-8% annually. Shale wells decline much faster ..after 2-3 years they stabilize for a while at levels way below initial production.

    As the clock ticks and the months go by...and the rig counts drop...all of this normal and expected and natural production decline continues...unabated..... every day...

    Anyone here know how much Arabian sea salt water the Saudis are pumping into their big fields to maintain pressure and production? It is common knowledge...Even Ghawar...their biggest oil field....so....as time passes...natural production declines will eventually balance the market...then send it into shortage...
    Jul 14, 2015. 06:23 PM | 13 Likes Like |Link to Comment
  • Exxon suspends drilling from three platforms off Santa Barbara [View news story]


    I repeat:

    CA don't need no stinkin' oil and they don't need no stinkin' water projects...or electricity from coal or oil...or natural gas.......so...relax and watch them....uh....shrivel up....at an accelerating pace...it seems...

    They think they can survive on solar panels that don't work anywhere near up to initial projection in their Mojave Desert ...45%??? [look it up--I did]...they can eat the birds their solar projects actually fry [OK...merely "char"] in flight ..called "flame outs".... and the birds their obscenely ugly wind projects... dice....[these have to be counted by law...and they are...look it up]

    They don't want dams or water projects or reservoirs...so..what will happen...will happen...and...don't feel sorry for them...they get what they vote for...

    But...this is key....by all means...protect those green golf courses and the beautiful lawns of the Hollywood Stars...those must be protected....

    That's the CA way...
    Jul 10, 2015. 11:13 PM | 1 Like Like |Link to Comment
  • Exxon suspends drilling from three platforms off Santa Barbara [View news story]
    CA don't need no stinkin' oil and they don't need no stinkin' water projects...or electricity from coal or oil...or natural gas.......so...relax and watch them....uh....shrivel up....

    They think they can survive on solar panels that don't work anywhere near up to initial projection in their Mojave Desert ...[look it up]...they can eat the birds their solar projects actually fry in flight ..called "flame outs".... and the birds their obscenely ugly wind projects... dice....

    They don't want dams or water projects or reservoirs...so..what will happen...will happen...and...don't feel sorry for them...they get what they vote for...

    But...this is key....by all means...protect those green golf courses and the beautiful lawns of the Hollywood Stars...those must be protected....
    Jun 24, 2015. 12:48 AM | 25 Likes Like |Link to Comment
  • Seadrill Ltd. Agrees To Sell The West Polaris To Seadrill Operating LP For A Total Value Of $750 Million [View article]
    The SDLP statement said the Board at SDLP regards the transaction as accretive but does not plan to raise the SDLP distribution based on the transaction. They state "The Polaris Acquisition is intended to reduce risk by increasing the Company`s distribution coverage, asset diversification and revenue backlog."
    Jun 17, 2015. 11:48 AM | 1 Like Like |Link to Comment
  • Frontline files for $100M mixed shelf, 55M-share offering for sellers [View news story]
    There is an SEC Filing...dated today...
    Jun 11, 2015. 10:47 PM | Likes Like |Link to Comment
  • Frontline files for $100M mixed shelf, 55M-share offering for sellers [View news story]
    http://1.usa.gov/1MNp04N


    .........................


    Re: Frontline Files Offering.................

    "SELLING SHAREHOLDERS
    The selling shareholders, who will be named in a prospectus supplement, may offer and sell from time to time pursuant to this prospectus, an aggregate of up to 55,000,000 of our ordinary shares that were previously issued in private placements that occurred in June 2015. We will not receive any of the proceeds from any sale of our ordinary shares by any of the selling shareholders."

    .........................

    Let's see...hmmm....55 million shares?...in a private placement this month?...

    Wait! I think I've solved this mystery!!!!!


    Duh...SFL will sell their FRO shares...

    Can't wait to read the prospectus supplement to learn ..uh..this..

    What will be interesting will be to see what SFL plans to do with the proceeds...
    Jun 11, 2015. 10:40 PM | 2 Likes Like |Link to Comment
  • Ship Finance International Now At A Good Entry Point [View article]
    SFL pays dividends out of cash flow and usually shows less robust GAAP earnings. They generally invite analysts concerned about this to read their footnotes or to give them a call to discuss the issue...

    After owning SFL in varying and usually increasing quantities since the company was founded...[my first several batches of shares were spun off for "free" from FRO back in the Golden Age of Tankers during the initial years of SFL]...I would say that CEO Ole Hjertaker is not a swashbuckler or reckless risk taker but more of an accountant type.... and he doesn't raise the dividend unless he thinks the increase is justified and sustainable.

    In a very volatile sector....ocean shipping...SFL has done well with dividend stability and has never been in violation of any debt covenant and often gets good deals offered to them because they have access to capital and a good financial history and record with the Nordic Banks and other funding sources...
    May 15, 2015. 12:43 PM | 3 Likes Like |Link to Comment
  • Ship Finance International Now At A Good Entry Point [View article]
    "thoughts on conflict of interest. My concern is mostly related to whether SFL management actually has any power to stop a deal, if they do not think it is in the best interest for all shareholders, in the long run" LR

    .........................

    Well, in the case of FRO/SFL back in late 2011 FRO was toast and the concerns about the tankers, actually owned by SFL... were threatening to bring down SFL as well...& as I said...With Fredriksen owning 40% of SFL, he had a large incentive to find a way to "comfort and reassure" the markets as to SFL and to minimize the negative tanker impact on SFL..which is exactly what he did...and it worked as planned.

    IMO opinion SFL management is more independent than that of most Fredriksen Group companies...but...when your major shareholder owns 40% of your company that does affect the relationship.

    I would just observe the recent SFL Capesize deal announcement regarding Golden Ocean...another Fredriksen Group company:

    "Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the "Company") today announced the agreement to acquire eight Capesize dry-bulk carriers from subsidiaries of Golden Ocean Group Limited ("Golden Ocean").

    The vessels are named Golden Beijing, Golden Zhoushan, Golden Magnum, Battersea, Belgravia, Golden Zheijang, Golden Future and KSL China and were built in Korea and China between 2009 and 2013. The total acquisition price will be $272 million, or $34 million on average per vessel. The vessels are expected to be delivered to Ship Finance within July 2015, subject to customary closing conditions.

    The vessels will be chartered on a time-charter basis to a subsidiary of Golden Ocean for a period of 10 years. The daily base charter rate will be $17,600 during the first seven years, and $14,900 thereafter. In addition, there will be a 33% profit share for revenues above the base rate, calculated and paid on a quarterly basis.

    Our charter backlog will increase by nearly $500 million and aggregate annual EBITDA contribution from the vessels, excluding profit share, is estimated to more than $30 million on average during the first seven years of the charter. Golden Ocean will have a purchase option after year 10, and if such option is not exercised, Ship Finance will have the option to extend the charters by three years.

    The Company is in the process of arranging bank financing for the transaction, and we expect a financing amount of approximately $22 million per vessel, or approximately $176 million in total. Similar to most of our other financing arrangements, we expect to provide only a limited corporate guarantee for the financing.


    Ole B. Hjertaker, CEO of Ship Finance Management AS, said in a comment: "We are pleased to announce an acquisition of vessels in combination with long-term charters to a leading company in the dry-bulk market.

    We believe the entry point is attractive and there could be significant additional value in the profit sharing agreement over time. Our charter backlog and long-term distribution capacity is building in an accretive manner, and there is still good capacity for more investments without raising additional equity capital."

    .........................

    It appears this Capesize deal was structured favorably for SFL and will likely result in a dividend increase over time. I really like the fact that the 33% profit share above the base rate is calculated quarterly and.... if any profit share is due... will be paid quarterly.

    The current deal with the SFL tankers chartered to FRO is resulting in substantial profit share..and did in 2014... but it is accrued [and announced] quarterly but not paid until March of the following year....and the 2015 tanker profit share won't be actually paid in cash to SFL by FRO until March, 2016.


    May 15, 2015. 12:45 AM | Likes Like |Link to Comment
  • Ship Finance International Now At A Good Entry Point [View article]
    I have owned SFL for many years....it is conservatively managed....John Fredriksen owns 40% of SFL and always has...

    The deal made back in late 2011 was good for both companies...The $106 million advance FRO paid SFL was used to lower the debt related to the tankers to safe levels, and actually, the tanker related debt has been well below the scrap value of the tankers for quite a while now...

    Considering how long dayrates for tankers have been weak....several years...up until recently...the fact those very low dayrates did not affect SFL much at all shows the wisdom of the deal...which also allowed FRO to survive until the fairly recent rate rebound...which then allowed FRO to pay their bond indebtedness in full and on time....
    May 14, 2015. 03:30 PM | 1 Like Like |Link to Comment
  • Diamond Offshore Hopes Leverage Kills Competition [View article]
    Yeah go-4-it, I fully understand your thoughts on Seadrill...you have made them quite clear...over and over again.

    You were so upset and amazed when Seadrill management reacted to the halving of the oil price by suspending the dividend.

    Apparently you did not think the downdraft in the oil price from $107 to $47 should have influenced the Seadrill dividend at all.

    Happily, management took appropriate action based on the new facts on the oil price...obvious to all...but forecast and expected by no one...

    And now, they have the strength and the cash flow to not only survive...but to eventually thrive once more...just as they did after the 2008-2009 Black Swan.

    The last time Seadrill's share price was utterly destroyed was during the famed Black Swan as the SDRL shares hit $5.90 in December 2008..BUT the Seadrill shares then hit $28 just 16 months after that $5.90 low..And the SDRL shares then hit $38 a mere 6 months later or just 22 months in total after the December 2008 low of $5.90..wasn't that fun?..yes it was..$5.90 to $38 in 22 months. And there was a similar remarkable comeback after the Macondo debacle in 2010 ..can it happen again? Maybe..

    We do know that Seadrill won't be scrapping old rigs and taking big writedowns...because they don't have those issues...
    May 6, 2015. 11:02 AM | 2 Likes Like |Link to Comment
  • Diamond Offshore Hopes Leverage Kills Competition [View article]
    DO is whistling past the graveyard...this is what an actual real modern drillship looks like...

    http://bit.ly/1cku447

    The modern rigs will get work and the old rigs will get scrapped...and no major driller has more old rigs than DO....

    John Fredriksen personally has over $4 Billion...in cash.

    The Scandinavian Banks have worked with him for decades and that will continue...

    The Seadrill "credit crunch" is a merely figment of uninformed analysts imagination...look at the price action today....

    I attend the Seadrill annual meeting in Bermuda every year....

    That tends to lead to a realistic view of the company...and its future prospects...

    and Seadrill has the youngest high specification fleet of any major offshore driller ....

    And...After you check out the above link...then watch this one...and compare these units to the rusty old DO rigs...and ...think!

    http://bit.ly/1q1hNRo
    May 5, 2015. 11:50 PM | Likes Like |Link to Comment
  • Ship Finance Needs To Skillfully Redeploy Capital [View article]
    The difference being that SFL will no longer get $6500 less than the old rates if the tanker market weakens again which is what was going on during much of the last few years and during that weakness SFL still was able to maintain and occasionally increase its dividend...
    Apr 10, 2015. 10:38 AM | Likes Like |Link to Comment
  • Ship Finance Needs To Skillfully Redeploy Capital [View article]
    And by the way...the article here states that "those sweeps end at the end of 2015 and the ongoing tanker fleet value isn't high."

    The sweeps do not "end" but continue at a rate reduced back down from 25% of the cash flow amount above the old day rates...to 20% ..even as the daily rate paid by FRO to SFL increases $6,500 per day back up to the original charter rate in the original agreement.

    As far as the "value of the tanker fleet"..on the books ..book value......for sure...it isn't very high..actually..and as the years have passed ..the associated SFL debt related to the tankers has been paid down to well below the scrap value of the tankers...

    However, while that fact removes most of the downside risk of SFL owning the tankers...covering the downside so to speak...it also means that as long as tanker rates remain firm as they are currently..SFL will be harvesting very good cash flow from the tankers...some of the tankers are even on very profitable long term contracts as oil storage vessels chartered to those speculating on the oil price...

    This means the tankers don't have to burn fuel ..they just park somewhere and wait for delivery instructions that may not come for months...

    So...once again..merely read the lengthy and detailed press releases from December 2011 to understand the original agreement between FRO and SFL and to understand the renegotiated agreement...and to understand exactly what happens 1-1-2016...
    Apr 9, 2015. 02:32 PM | Likes Like |Link to Comment
  • Ship Finance Needs To Skillfully Redeploy Capital [View article]
    The renegotiated agreement ends 1-1-16 which is how it was written and agreed to...and it then reverts back to the original charterhire agreement...

    And the renegotiated deal reduced the charter rates paid to SFL by FRO by $6,500 per day per tanker...in return for a large upfront cash payment and a increased profit split...and per the signed agreement it ends 1-1-2016...and the daily charterhire rates will then rise $6,500 per day per tanker.. more cash to SFL.

    ...and it ain't gonna get renegotiated again as tanker rates are now nice and strong and FRO is not going to go bankrupt..but will likely be folded into FRNT.

    Please listen to the next few SFL conference calls for complete details...

    And read the details of the renegotiated agreement from December, 2011 if you have not...it is in the SFL and FRO press release archives...

    It is very clear what the agreement is and was...and how it will affect SFL...
    Apr 9, 2015. 01:00 PM | Likes Like |Link to Comment
  • Ship Finance Needs To Skillfully Redeploy Capital [View article]
    *****John Fredriksen owns 40% of SFL...always has and likely... always will.

    ****Don't be so sure that JF will force SFL to take any specific asset...SFL is run more conservatively than other Fredriksen Group companies and they maintain a certain distance and autonomy which has paid off over the years for all concerned...

    *****You do know and understand that when the currently in force "renegotiated arrangement" ends between SFL and FRO on 1-1-2016...that the charter rates paid to SFL on each of the tankers will immediately go..up...about $6,500 per day per vessel? You do understand that? I hope so. [That is a key factor many do not understand..]

    ****SFL management..most especially CEO Ole Hjertaker and CFO Harald Gurvin have demonstrated excellent ability in deploying new funds profitably soon after they become available.

    ****Should any of the SFL "offshore assets"...no matter if they are the drilling rigs or the offshore supply vessels...[or any other SFL asset in any asset class]...become unemployed with no contract...the charter rate is still legally and contractually due and payable to SFL each and every day by the charterer and if not paid SFL...[the actual owner of the asset]...can then seize the asset and file a lawsuit for the back charter hire due..and they have done that exact thing in the past in the bulker space among others...

    ****SFL's contracts for the offshore rigs are "front loaded" so that during the first 5 years of the contract the payments due from Seadrill are very large...so that SFL may pay down the related debt relatively quickly and still pay a nice dividend...thereafter.... day rate due to SFL declines every 5 years or so...so that Seadrill can employ the now older rig profitably even in tough markets and still pay the new agreed and planned for day rate to SFL...

    ****SFL's accounting is a mystery to most...just suffice it to say that they would not set a dividend level without expecting sufficient cash flow to cover that dividend. They invite analysts and anyone else who wants to during every conference call to call them... personally... and discuss the issue which they consider too complex to cover on conference calls. But, they have an excellent and conservative dividend record...an excellent and diversified backlog...and even their renegotiated deal with John Fredriksen and Frontline worked out well for them...and for Frontline...

    And why not?...FRO was already toast...why not save SFL?...which is what 40% SFL owner John Fredriksen did...to the eventual benefit of both companies....
    Apr 7, 2015. 10:39 PM | 9 Likes Like |Link to Comment
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