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Jan H. Lessner

Jan H. Lessner
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  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    The problem is, that the proverbial Dollar is just an expectation, resp. a figure derived from a comparison with other companies.

    Of course evaluating the relation between data is one method. The question is, whether You want to base Your decision on that.

    In my view serious investing requires also to estimate future cashflows and earnings and to derive from this a net asset value based on the discounted cash flows and a residual value. This includes at least three scenarios (worst case, expected case, best case) for the key parameters (e. g. oil price, exploration costs, etc.).


    Mar 2, 2015. 12:58 PM | Likes Like |Link to Comment
  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    Get back to the facts:

    Rewarding the shareholders is something completely different from burning cash. Spending money for exploration and/or acquisition may create value but is by its very nature risky.

    What is the Your estimate on the IRR for further CapEx? Above 100%? Really? Even if so, it is less than the "undervaluation according to the author. Get familiar economical concepts like opportunity costs.
    Mar 2, 2015. 09:07 AM | Likes Like |Link to Comment
  • Ocean Rig UDW Releases 4th Quarter And Full Year 2014 Results [View article]
    The problem with HERO is in my view the financial stability issues. If You look at it as a going concern, it may be undervalued. I assume that HERO is now under the control of the lenders, since the companies needs waivers because soon there will be breaches of covenants.

    RDC and ORIG are completely different animals. RDC has a solid balance sheet and long term contracts for the four UDW drillships. RDC has a small dividend, so there isn't a big issue with looming dividend cuts. ORIG is more leveraged, but has a very strong order backlog and a very capable fleet. ORIG needs very low dayrates to reach break even on a cash flow basis.

    Mar 2, 2015. 03:21 AM | 1 Like Like |Link to Comment
  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    Do You think that Your comment is a appropriate reaction?

    Of course, Your joke brought You the back-slapping of the author. But a serious investor would doesn't look for applause but for returns.

    Anyway Your comment reveals something important: Apparently You think that the shareholder friendly scenarios are as likely as what You added, namely nearly zero. Thus d) remains.
    Mar 2, 2015. 03:05 AM | 1 Like Like |Link to Comment
  • Ensco Slashes Dividend, But Here's Why I'm Not Selling [View article]
    I've read the comments and my conclusion from them is, that a lot of market participants interprets the current market for offshore drilling not as a cyclical downturn and not even as a secular downturn but as the beginning of an agony of this industry.

    The core premises of this are, that
    i) the oil price won't recover to levels above 80 USD
    ii) onshore shale oil production is cheaper than offshore
    and
    iii) the relevant supply of rigs outstrips the demand for a foreseeable time.

    Since it is a company-specific article, I thin this is not the place to discuss these premises in detail, but none of these three premises seems to me overwhelmingly convincing.
    Mar 2, 2015. 02:52 AM | 1 Like Like |Link to Comment
  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    Don't forget CapEx and that the management is at anytime able to spend the money for an overpaid acquisition.

    Ask Yourself what happens, in Your case:
    a) Management introduces a share buyback
    b) Management introduces a special dividend
    c) the is liquidated and all proceeds are distributed to shareholders
    or
    d) Management spends the money and additionally borrowed money for exploration or acquisition.
    Feb 28, 2015. 08:49 AM | 1 Like Like |Link to Comment
  • Ocean Rig UDW Releases 4th Quarter And Full Year 2014 Results [View article]
    The dividend is more important for shareholders of ORIG than for shareholders of other competitors since the dividend returns money to shareholders equally. Thus this dividend indicates that George Economou is willing to share the results with the other shareholders.

    Order backlog is more important than ever before. Thus I like ORIG and Songa Offshore ASA much. Anyway I haven't understand the financial items in the quarterly report. Could You shed some light on this issue? Why had ORIG to make non-cash write-offs on debt?
    Feb 27, 2015. 07:58 PM | Likes Like |Link to Comment
  • Swire Is Trading At Substantial Discount To Net Asset To Value [View article]
    I think we will see this pullback sooner or later.

    What are the major positive/negative catalysts for this conpany? Is ist just a bet on Asian economy in general?
    Feb 27, 2015. 07:41 PM | Likes Like |Link to Comment
  • Arcos Dorados Getting Cheaper By The Day [View article]
    What are the major catalysts?

    - South American currencies won't raise against the USD as long as prices for ore and oil don't recover. There is a very small base of export capable industry in South Anerica, thus weak local currencies doesn't helps much.

    - Problems in political unstable countries like Argentina and Venezuela are closely linked to oil price. The socialist government will try to force ARCO to keep prices low.
    Feb 27, 2015. 07:33 PM | Likes Like |Link to Comment
  • Hercules Offshore Now Forced To Scramble [View article]
    As the article states there is $1.21 billion long term debt, but no maturities until 2019. Anyway EBIT, CF and book value are shrinking fast and I assume that the bonds and loans have covenants refering to these figure. E. g. HERO has to maintain a certain relation of debt and equity/income.

    If they don't, they depend on the lenders and o the lenders perception whether it is better to liquidate the company now or to accept waivers.

    The vultures are already in the air and HERO is one of the weakest animals among the herd. The value may be there, but I think that HERO won't have enough breath to weather the storm.
    Feb 27, 2015. 07:19 PM | 4 Likes Like |Link to Comment
  • Ensco Slashes Dividend, But Here's Why I'm Not Selling [View article]
    Order backlog will shrink further. There are a lot of very new and high-tech UDW drillships warm stacked and further rigs will hit the waters. That's the supply side. On the demand side we see E&P companies not only cancelling tenders but also early terminating contracts in force.

    Under this circumstances there has been no other choice to cut down the dividend and I think, they should even had cancel it completely. Although ESV isn't as leveraged as some competitors they must now deleverage further and bring down debt.

    Since a lot of equity has been wiped out and future OCF will shrink, they have to balance the liabilities. I would like to say, that there may be some room for a modest share buyback at these low share prices, but I fear the situation is too bad to think about share buybacks.

    ESV still has some room to sell some old rigs for scrap. Steel prices are low, but that will provide further cash.

    I think that ESV will be one of the survivors in this industry, but we haven't Hit the bottom yet.
    Feb 27, 2015. 07:00 PM | 4 Likes Like |Link to Comment
  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    Acquisition of a competitor or assets from a competitor is another risk. PTA.TO may be undervalued or not, but nobody beside management can estimate whether they overpay or not, if they go on a shopping tour.

    The only ones who profit from an acquisition will be the management via extra bonus or higher salaries.

    If one thinks that PTA.TO is the most undervalued oil company of the world, no acquisition makes more sense than a buyback of own shares. If one thinks there are more undervalued competitors, one should sell PTA.TO and pay that one instead.
    Feb 27, 2015. 04:08 PM | 4 Likes Like |Link to Comment
  • Hercules Offshore cut to Sell from Buy at Deutsche Bank, sets $0 target [View news story]
    It all depends on how long the oil price stays or falls below approximately USD 75. The analysts don't predict future oil prices. They just account the value of a company under current or foreseeable parameters.

    If the oil price doesn't recover in 2016 or before I would assume bankcruptcy for HERO or some one-digit pennies paid by an private equity investor.
    Feb 27, 2015. 03:41 PM | Likes Like |Link to Comment
  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    Cash exceeding the debt, doesn't mean that there is a positive cash flow. A positive cash flow requires that revenue is higher than the cash outflow.
    Feb 27, 2015. 01:09 PM | 1 Like Like |Link to Comment
  • Petroamerica Oil: The Strong Buy Rating Has Become Even Stronger [View article]
    Neither the article nor the latest press release say anything about all-in sustaining costs or just production costs vs. interest expenses, g&a expenses, CapEx etc.
    Feb 27, 2015. 01:07 PM | 1 Like Like |Link to Comment
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