FPSO'S

[10 bagger]

Sevan.ol.. Mike

"They will have 7 FPSO's in use by 2010. I know that the Sevan 3 was contracted to Oilexco for $370M for 5 years. That translates to $202.7K/day. If we assume that all of their FPSO's contract at the same rate, they will have revenue of $518M/year in 2010. I'm sure assuming a constant day rate for all FPSO's is quite inaccurate but that is the best I have right now. I would bet that day rates will go up over time but I have no idea how much they will increase."

I what you said there is no dispute.. But let me add the what makes Sevan the company to beat..The Sevan Driller is under a 6 year fixed contract at $400,000.00 plus per day to PetroBras.SA..

Sevan FPSO's at present have been actually test tanks and have commanded day rates of $80,000.00 to as you posted $202,000.00 to Oil.l.. Venture actually went on cotract at $164,000.00 per day..
Sevan 650 which is under construction with a capacity of 650,000 barrels will have a dayrate of around $285,000 at my best guess..

As these units get out into the harsh water enviroments and as of now the only Drilling Rigs that will drill as deep as the Sevan Driller I expect that Sevan will pick up orders for an additional 2 Sevan Drillers and 4 650,000 to 1,200,000 Barrel FPSO's..

Construction time and expense of building Sevan units are about 50% of normal drilling units and 40% of new FPSO's.. In fact new build Sevan FPSO's compete in price with FPSO conversions from X-tankers and liquid carring vessels.. Also the avil of these vessels for conversion is limited as old fleets are still trying to catch up for double hull mandates..

Sevan.ol is not playing catch up but is creating a totaly new industry baised upon thier patented tecnology..

I see the 7 units at a little different day rates than you..

#1 at $80,000 per day (I believe this day rate actually end up being $149,000..)
#2 at $164,000 per day
#3 at $164,000 per day
#4 at $202,000 per day
#1 Sevan Driller at $400,000 per day
#5 at $260,000 per day
#1 Sevan 650 at $285,000 per day
#2 Sevan Driller at $475,000 per day
#3 Sevan Driller at $500,000 per day
#2,#3 Sevan 650 at $300,000 per day
#1,#2 Sevan 1,200 at $450,000 per day

This gives me a total of $1,197,200,000.00..

What is really interesting is that the loans that have been secured at present were baised upon speculation and Day Rates that were created have revenues that equal loan values in less than 3 years..

I think that Sevan will be able to maintain a margin after deduction of cap interest costs and dep of 40% and cash flow equal to 70% of revs..

My guess for earnings are:

2008,, $0.70 per share..
2009,, $1.20 per share..
2010,, $3.60 per share..
2011,, $6.00 per share..

How close I will come is anyone's guess but I do believe that progress will also be made on Ngas and offshore water desalination plants in the near future baised upon Sevan tech..
In addition Kanfa AS, a 100% sub has landed $62,000,000 in engineering contracts this year..

Baised upon my thoughts Sevan.ol is at least a 5 bagger from here and has the possibility of being a 10-bagger.. It has what the market likes,, earnings that are predictable each time a new unit goes on lease.. These units also have lives of at least 50 years and once any field runs dry they may be moved at rates far cheaper than ripping up pipe lines from the bottoms floor.. hank