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FYI: Frontline earnings report
Published: 15:17 08.02.2008 GMT+1 /HUGIN /Source: Frontline Ltd /OSE: FRO /ISIN: BMG3682E1277
FRO - Invitation to Presentation of Q4 2007 Results
Frontline's Fourth Quarter 2007 results will be released on Thursday February 14, 2008. There will be held a presentation and a teleconference / webcast as described below:
1. Presentation
A presentation of Frontline's Fourth Quarter 2007 will take place in Oslo at "Vika Atrium Conference Centre", Munkedamsveien 45, ("Aker Room") on Thursday February 14, 2008 at 08:30 A.M. If you wish to attend you need to confirm to our Reception at +47 23 11 40 00.
2. Teleconference and Webcast
A conference call will be held at 03:00 P.M. CET (Norwegian time) on Thursday February 14, 2008. The presentation will be available for download from the Investor Relations section at www.frontline.bm (under "Presentations") from Thursday morning.
To listen you may do one of the following:
a. Webcast
Go to the Investor Relations section at www.frontline.bm and click the "Webcast" link. To listen to the conference call from the web, you need to have installed Windows Media Player, and you need to have a sound card on your computer.
b. Conference Call
PARTICIPANTS DIAL IN TELEPHONE NUMBERS
Country Number
Norway Free Call 800 19 641
International Dial In +44 (0) 207 138 0824
UK Free Call 0800 032 4094
USA Free Call 1866 239 0753
Participants will be asked for their full name & Conference ID. The Conference ID is 4947116.
There will be a Q&A session after the presentation. Information on how to ask questions will be given at the beginning of the Q&A session.
Please download the presentation material from www.frontline.bm in order to follow the presentation slides while listening to the conference.
ENCORE DETAILS
Encore Replay Access Number: 4947116#
International Dial In/UK Local +44 (0) 207 806 1970
UK Free Call Dial In 0800 559 3271
USA Free Call Dial In 1866 239 0765
Participant list information required: Full Name & Company
Hey, tankerfans. Look at this!
http://www.skysails.info/index.php?L=1
$30bn coal, iron ore bonanza
Thursday, 07.02.2008, 12:18am (GMT)
Australia's coal and iron ore miners are close to settling massive price increases with Chinese and Japanese customers that will deliver a $30 billion bonanza to the nation's export revenue.Severe bottlenecks at Australia's coal ports, and Queensland's floods, have sent the world spot prices for coal soaring. Analysts believe coal prices will double, while Asian steel mills are expected to settle for a 60 per cent jump in iron ore prices.
Australia's export revenue from coal and iron ore is set to jump from $42 billion to more than $70 billion next year if the increases are achieved. The revenue surge will also keep the pressure on inflation, taking unemployment lower and putting available capacity under greater stress. The Treasury Department is holding a workshop on February 14, bringing together Reserve Bank officials, the private sector and academic economists, to consider the implications of the new impetus behind the commodity boom coming from India and China.
Coalminer Xstrata has offered to settle with Japanese steel mills for $US210 ($233) a tonne for coking coal from April, more than double the existing price of $US95. But Citigroup's global head of commodities, Alan Heap, said the offer was made before the Queensland floods, which had pushed spot prices above that level. BHP Billiton has cancelled two trips to Tokyo to discuss coal pricing and is waiting to assess the final damage from the Queensland floods. Disruptions to coal shipments out of Queensland's Dalrymple Bay port have recently worsened, forcing one of the mining companies to cancel contracted shipments.
Australia is by far the biggest supplier of coking coal, which is used for steel-making, supplying more than two-thirds of all world shipments, so the disruptions have had an immediate effect on prices.
Australia provides about a quarter of globally traded thermal coal, used by power stations, but its exports have dropped as miners have given preference to the higher-value coking coal.
Source: The Australian
GM Stuffit. FYI: GDOCF/GOGL up in Oslo 3.6% NOK27.35 = USD4.94
Published: 08:53 08.02.2008 GMT+1 /HUGIN /Source: Golden Ocean Group /OSE: GOGL /ISIN: BMG4032A1045
GOGL - Acquisition of Kamsarmax Newbuilding contracts and long term time charter contracts
Golden Ocean Group Limited ("Golden Ocean" or "the Company") is pleased to advise that the Company has acquired two option two newbuilding contracts at Zhoushan Jinhaiwan Shipyard (Jinhaiwan) in China.
The vessels of 80,000 dwt will be delivered during 2011 and are "sister vessels" of the series ordered in October 2007.
The delivered cost for the vessels is estimated to be about $52 million per vessel.
Golden Ocean has already ordered 13 vessels at Jinhaiwan. The experience gained so far indicates that this yard is likely to become one of the leading yards in China going forward.
The Company has also fixed out on time charter four of the Kamsarmax vessels with delivery in 2010 and 2011 for a period of 10 years. The time charter rate is $24,500 per day on the 2010 deliveries and $24,000 per day on the 2011 deliveries, both less 5 % total commission. These contracts will write the vessels down to zero over the charter party period.
Golden Ocean does still have four of its ten firm Kamsarmax vessels open, with an option to declare two additional units from the yard.
The combination of the competitive price on the newbuildings and the long term charters will secure Golden Ocean's continued growth and at the same time able the Company to deliver long term high return to their shareholders including solid dividends.
Hamilton, Bermuda
February 8, 2008
Contact Persons:
Herman Billung: CEO, Golden Ocean Management AS
+47 22 01 73 40
Geir Karlsen: CFO, Golden Ocean Management AS
Calpine resumes trading on NYSE
Thursday February 7, 4:45 pm ET
Calpine Corp. on Thursday resumed trading on the New York Stock Exchange with newly issued stock.
Calpine's (NYSE:CPN $16.60 - News) CEO, Robert P. May, said the company "streamlined our operations and strengthened our balance sheet, and we are returning to the NYSE as a stronger and more competitive power company with one of the cleanest generating fleets in the United States."
Last week the power producer -- which has dual headquarters in San Jose and Houston -- emerged from Chapter 11 bankruptcy protection and closed a $7.3 billion exit financing facility that includes a one-year, $300 million bridge facility expected to be paid by the end of the first quarter.
The company entered bankruptcy in December 2005 with about $22 billion in debt. It has since sold off about a dozen power plants and cut its work force from about 3,300 employees to 2,200.
Calpine is one of the largest electricity producers in the state. It owns 72 natural gas and geothermal power plants across the nation and sells electricity to utilities, including Pacific Gas and Electric Co.
The company's stock closed the day at $16.60.
Published February 7, 2008 by the Silicon Valley / San Jose Business Journal
Offshore drillers: ATW good earnings
Atwood Oceanics Announces First Quarter Earnings for Fiscal Year 2008
Thursday February 7, 4:15 pm ET
HOUSTON, Feb. 7 /PRNewswire-FirstCall/ -- EARNINGS -- Atwood Oceanics, Inc., (NYSE: ATW $85.59 - News) Houston-based International Drilling Contractor, announced today that the Company earned net income of $38,549,000 or $1.20 per diluted share, on revenues of $111,048,000 for the quarter ended December 31, 2007, compared to net income of $21,085,000 or $0.67 per diluted share, on revenues of $88,800,000 for the quarter ended December 31, 2006.
From Forbes:
Atwood Oceanics (nyse: ATW - news - people ) boasts an outstanding combination of Quadrix scores. The overall score is 97, with 97 in financial strength and 92 in performance. The company, an operator of offshore drilling vessels, has no long-term debt and more than $3 per share in cash. Improving international and premium drilling markets bode well for growth. Because of tight capacity, pricing should remain favorable.
Operating results are likely to be strong over the next two years, bolstered by favorable rates and the addition of new vessels. Analysts project 53% profit growth in fiscal 2009. Atwood, trading at a reasonable 13 times expected year-ahead earnings, is rated "buy."
The Secret of Dividends
Rich Greifner
February 7, 2008
Between January 1926 and December 2006, 41% of the S&P 500's total return sprang not from the price appreciation of the stocks in the index, but from the dividends its companies paid out.
That's right -- a cool 41%. Annualized, that amounts to 4.4% of extra return each year. To put it in dollars-and-cents terms, consider this: An investment of $10,000 over that stretch of time would have grown to $1,013,000 without dividends. With dividends kicked in and reinvested, however, that same sum would have been worth a whopping $24,113,000 by the end of the period.
Talk about the miracle of compound interest!
I learned most of the above from Motley Fool Income Investor, the investing service dedicated to picking the market's most promising dividend payers.
I've also learned that a dividend payout doesn't tell you a thing about a company on its own. A fat payout figure can even be a bad sign if it's the result of a stock price that's hit the skids, or if an examination of the company's cash flows indicates that its payout is unsustainable.
If you're interested in checking out more of the dos and don'ts of dividend investing, here's a must-read article on the topic. Among other things, the write-up zeroes in on a metric known as the payout ratio, and it recommends gauging that number relative to a prospective investment's asset class. While there's no magic number to look for (or avoid), the article does provide a cheat sheet for dividend payers:
* Real estate investment trusts (REITs) with a funds-from-operations payout ratio below 85%.
* High-growth common stocks that pay out less than 50% of free cash flow (FCF).
* Banks that pay out less than 60% of FCF.
* Regulated utilities that pay out less than 80% of FCF.
The article also encourages investors with inquiring minds to scrutinize the source of a company's cash, the caliber of its corporate management, and the historical reliability of the firm's payouts.
The power of dividends
What if you're a "story stock" type? Well, I'd argue that even investors who generally favor lively stocks like Under Armour (NYSE: UA), First Solar (Nasdaq: FSLR), or Lululemon (Nasdaq: LULU) -- none of which pays a dividend -- can reap the benefits of dividend-paying stocks. A portfolio of nothing but race cars is likely to lead to bumps in the road -- and perhaps even the occasional crash.
A fistful of comparative low-yielders such as Valero (NYSE: VLO) and Sprint Nextel (NYSE: S) may not get the job done, either: Both currently yield less than the S&P. That's also true of ABB (NYSE: ABB) and Devon Energy (NYSE: DVN).
To soften a market downturn, a dividend must be substantial enough to offer meaningful cash returns or, as Jeremy Siegel has shown, allow you to reinvest in additional shares of stock.
Want a little assistance in your quest for dividend dynamos? You're in luck. Income Investor has established a track record, having identified more than 80 top-notch dividend payers that have what it takes to beat the market over the long haul. The service's picks have outclassed the S&P's total return since inception four years ago, and they beat up on the 500's yield as well. You can take Income Investor for a risk-free 30-day spin by clicking right here.
The plain facts show that dividend-paying stocks have outperformed in the past, and they have a good chance of doing so in the future. The secret, then, is this: Reinvest those dividends, and put the power of compounding to work in your portfolio.
This is adapted from a Shannon Zimmerman article originally published Jan. 18, 2006. It has been updated.
Rich Greifner also knows the secret of making a killer smoothie. Rich does not own shares in any company mentioned in this article. Under Armour is a Rule Breakers recommendation. Sprint Nextel is an Inside Value selection. The Fool's disclosure policy is no secret.
Legal Information. © 1995-2008 The Motley Fool. All rights reserved.
http://www.fool.com/investing/dividends-income/2008/02/07/the-secret-of-dividends.aspx
The Secret of Dividends
Rich Greifner
February 7, 2008
Between January 1926 and December 2006, 41% of the S&P 500's total return sprang not from the price appreciation of the stocks in the index, but from the dividends its companies paid out.
That's right -- a cool 41%. Annualized, that amounts to 4.4% of extra return each year. To put it in dollars-and-cents terms, consider this: An investment of $10,000 over that stretch of time would have grown to $1,013,000 without dividends. With dividends kicked in and reinvested, however, that same sum would have been worth a whopping $24,113,000 by the end of the period.
Talk about the miracle of compound interest!
I learned most of the above from Motley Fool Income Investor, the investing service dedicated to picking the market's most promising dividend payers.
I've also learned that a dividend payout doesn't tell you a thing about a company on its own. A fat payout figure can even be a bad sign if it's the result of a stock price that's hit the skids, or if an examination of the company's cash flows indicates that its payout is unsustainable.
If you're interested in checking out more of the dos and don'ts of dividend investing, here's a must-read article on the topic. Among other things, the write-up zeroes in on a metric known as the payout ratio, and it recommends gauging that number relative to a prospective investment's asset class. While there's no magic number to look for (or avoid), the article does provide a cheat sheet for dividend payers:
* Real estate investment trusts (REITs) with a funds-from-operations payout ratio below 85%.
* High-growth common stocks that pay out less than 50% of free cash flow (FCF).
* Banks that pay out less than 60% of FCF.
* Regulated utilities that pay out less than 80% of FCF.
The article also encourages investors with inquiring minds to scrutinize the source of a company's cash, the caliber of its corporate management, and the historical reliability of the firm's payouts.
The power of dividends
What if you're a "story stock" type? Well, I'd argue that even investors who generally favor lively stocks like Under Armour (NYSE: UA), First Solar (Nasdaq: FSLR), or Lululemon (Nasdaq: LULU) -- none of which pays a dividend -- can reap the benefits of dividend-paying stocks. A portfolio of nothing but race cars is likely to lead to bumps in the road -- and perhaps even the occasional crash.
A fistful of comparative low-yielders such as Valero (NYSE: VLO) and Sprint Nextel (NYSE: S) may not get the job done, either: Both currently yield less than the S&P. That's also true of ABB (NYSE: ABB) and Devon Energy (NYSE: DVN).
To soften a market downturn, a dividend must be substantial enough to offer meaningful cash returns or, as Jeremy Siegel has shown, allow you to reinvest in additional shares of stock.
Want a little assistance in your quest for dividend dynamos? You're in luck. Income Investor has established a track record, having identified more than 80 top-notch dividend payers that have what it takes to beat the market over the long haul. The service's picks have outclassed the S&P's total return since inception four years ago, and they beat up on the 500's yield as well. You can take Income Investor for a risk-free 30-day spin by clicking right here.
The plain facts show that dividend-paying stocks have outperformed in the past, and they have a good chance of doing so in the future. The secret, then, is this: Reinvest those dividends, and put the power of compounding to work in your portfolio.
This is adapted from a Shannon Zimmerman article originally published Jan. 18, 2006. It has been updated.
Rich Greifner also knows the secret of making a killer smoothie. Rich does not own shares in any company mentioned in this article. Under Armour is a Rule Breakers recommendation. Sprint Nextel is an Inside Value selection. The Fool's disclosure policy is no secret.
Legal Information. © 1995-2008 The Motley Fool. All rights reserved.
http://www.fool.com/investing/dividends-income/2008/02/07/the-secret-of-dividends.aspx
There are all kinds of problems in offshore drilling...
Mussel infestation costly for Diamond Offshore
Thu Feb 7, 2008 5:34pm EST
HOUSTON, Feb 7 (Reuters) - A colony of green-lipped mussels that made their home on the hull of a offshore drilling rig in New Zealand proved costly for the rig's owner, Diamond Offshore Drilling Inc (DO.N: Quote, Profile, Research).
Describing the infestation as a "new issue" for the company, Diamond told analysts on a conference call on Thursday it had to hire divers and blasters to remove the mussels, resulting in $5 million in cost overruns for the quarter.
The mussels were discovered when Diamond Offshore was moving the rig, called the Ocean Patriot, from New Zealand to a job in Australia, the company said.
The rig, which was out of commission for 23 days, could not be moved to Australia with the mussels because they are considered a nuisance in that country, said Les Van Dyke, director of investor relations.
Any delay is costly in the offshore drilling business. For example the Ocean Patriot will earn $350,000 a day in Australia, Van Dyke said.
Earlier, the Houston-based company reported a 26 percent decline in fourth-quarter earnings, as a drop in rig utilization weighed on results. (Reporting by Anna Driver in Houston; Editing by Andre Grenon)
NOV $58.70 Rig builders doing well. NOV's orderbook grew by $1 billion during the quarter.
Note: NOV is bying its rival Grant Prideco (GRP $49.16)
NOV Is Good Enough for Me
http://www.fool.com/investing/general/2008/02/07/nov-good-enough-for-me.aspx
Toby Shute (The Motley Fool)
February 7, 2008
For rig builder National Oilwell Varco (NYSE: NOV), monster financial results have become fairly routine. Another quarter, another record backlog. This time around, Mr. Market could not be bothered, and NOV's shares took a dive.
Well, I at least hope that you are interested in these latest results, dear Fool, because they were excellent.
For the quarter, revenues rose 28%, while operating profit lifted 51%. As for operating margins, they did what they always do:
Fiscal Period Operating Margin (%)
Q4, 2007 21.6%
Q3, 2007 21.1
Q2, 2007 20.8
Q1, 2007 19.7
Q4, 2006 18.3
Q3, 2006 16.1
Data from company press releases.
NOV wrings out efficiencies like nobody's business. This is what makes it such a successful serial acquirer. Just one example is last year's opening of a new aftermarket service center in Houston. This new space tackles rig refurbishment, freeing up other facilities to focus on new equipment. Management pointed directly to this and other manufacturing initiatives as the source of margin improvement in the core Rig Technology segment.
In the course of another educational conference call, I gained a completely new understanding of the firm's aftermarket sales business. As became clear, aftermarket does not mean afterthought.
It all began with CEO Pete Miller noting that NOV is building most of the world's deepwater rigs -- not to mention two harsh environment semisubmersibles for the giant Shtokman field that Total SA (NYSE: TOT) and StatoilHydro (NYSE: STO) are developing in collaboration with rouble-rouser OAO Gazprom (OTC BB: OGZPY). This newbuild activity translates to 20 years or more of service opportunities, including multi-million dollar refurbishments. This isn't quite a razor-and-razorblade business a la Intuitive Surgical (Nasdaq: ISRG), but there's a hint of that model at work here.
Now how is NOV so confident that drillers like Transocean (NYSE: RIG) or Atwood Oceanics (NYSE: ATW) won't take their aftermarket business elsewhere? The company's CFO noted that these high-tech rigs are not like those of generations past, and thus the owners are going to need more OEM "care and feeding." This isn't limited to offshore rigs, either. Management sees rising demand for more advanced land rigs internationally, which jives with another company's recent order from south of the border. All told, NOV continues to occupy an extremely strong position in the energy sector.
* Total and Atwood have a tale to tell.
* It took some dredging to reveal StatoilHydro's hedging.
TOP Ships (TOPS $2.90) Announces Delivery of the Fourth Drybulk Vessel
Monday February 4, 7:35 am ET
ATHENS, Greece, Feb. 4 /PRNewswire-FirstCall/ -- TOP Ships Inc (Nasdaq: TOPS - News) announced that it has taken delivery of the M/V VOC GALLANT, a 51,200 DWT super Handymax, or "Supramax" drybulk vessel, built in 2002 in China.
The M/V VOC GALLANT is the fourth of six drybulk vessel deliveries for the fourth quarter 2007 and first quarter 2008. The VOC GALLANT has been immediately chartered back to the sellers for a period of 18 months at a daily net rate of $25,650 on a bareboat basis.
About TOP Ships Inc
TOP Ships Inc, formerly known as TOP Tankers Inc., is an international provider of worldwide seaborne crude oil and petroleum products and of drybulk transportation services. The Company operates a combined tanker and drybulk fleet as follows:
-- a fleet of 19 tankers, consisting of 11 double-hull Suezmax tankers and
8 double-hull Handymax tankers, with a total carrying capacity of
approximately 2.0 million dwt, of which 78% are sister ships. Twelve of
the Company's 19 tankers are on time charter contracts with an average
initial term of over two years with all but three of the time charters
including profit sharing agreements above their base rates. In
addition, the Company has ordered six newbuilding product tankers,
which are expected to be delivered in the first half of 2009.
-- a fleet of four drybulk vessels with delivery of two additional drybulk
vessels expected during February and March 2008. Including these two
vessels, three of the Company's six drybulk vessels will have period
charter contracts for an average period of 18 months.
Tanker report. Read the last week's Bassøe report (week 5). Dayrates have doubled in a week.
http://www.pfbassoe.no/EpsPareto/Templates/WebRequestPage.aspx?Main=Y&
GM Stuffit. GDOCF/GOGL up in Oslo NOK28.55 = USD5.27
Published: 08:50 04.02.2008 GMT+1 /HUGIN /Source: Golden Ocean Group /OSE: GOGL /ISIN: BMG4032A1045
GOGL - Long term time charter contracts
Golden Ocean Group Limited ("Golden Ocean" or the "Company") is pleased to advise that the Company has fixed out on time charter the Capesize vessel M/V Channel Navigator (172,000 dwt, built 1997). The vessel will be delivered to the Charterer by the end of April 2009 for a five years time charter contract.
The agreed daily time charter hire is $53,500 less 3.75% total commission. The cash break even for the vessel is $16,000 per day.
The company has also fixed out on time charter one of the Jinhaiwan Capesize newbuildings. The vessel will be delivered to the Charterer during the second half of 2009 for a 10 years time charter contract.
The agreed daily time charter hire is $40,500 less 3,75% total commission. The cash generated from this charter is expected to write down the investment to zero in less than seven years. The Charterer has been granted an option to purchase the vessel for $92 million on completion of the charter party.
These transactions will further strengthen the Company's long term commitment to deliver a high return to their shareholders including a solid dividend.
Hamilton, Bermuda
February 4, 2008
Contact Persons:
Herman Billung: CEO, Golden Ocean Management AS
+47 22 01 73 40
Geir Karlsen: CFO, Golden Ocean Management AS
+47 22 01 73 53
Horizon Lines 4Q Profit Up Slightly (HRZ $21.20)
Friday February 1, 10:11 am ET
Horizon Lines 4th-Qtr Profit Up Slightly As Stable Vessel Rates Offset Higher Fuel Costs
CHARLOTTE, N.C. (AP) -- Horizon Lines Inc. said Friday its fourth-quarter earnings edged up as stable vessel rates and a diversified cargo mix balanced higher fuel costs and weakness in the container shipping company's Puerto Rican business.
The company earned $10.7 million, or 32 cents per share, compared with $10.6 million, or 31 cents per share, in the year-ago quarter.
Operating revenue rose 10 percent to $316 million, from $287.5 million in the prior-year period.
Analysts were expecting a profit of 31 cents per share on revenue of $312.4 million, according to a poll by Thomson Financial.
The company said a more profitable cargo mix, stable rates in offshore markets, and cost cuts offset continuing weakness in its Puerto Rican business and "unprecedented increases" in fuel prices.
For the full-year, profit sank 60 percent to $28.9 million, or 85 cents per share, compared with $72.4 million, or $2.14 per share, in 2006. Revenue rose 4 percent to $1.21 billion.
Shares soared $1.14, or 6 percent, to $20.05 in morning trading.
FYI: Take a look at cellulosic ethanol companies Verenium Corporation (VRNM $4.10), Bluefire Ethanol Fuels Inc. (OTC: BFRE $3.94) and Domtar Corp.(UFS $8.07),biofuels chemicals.
Read this if interested. Some information:
New Hope for Biofuels
By Nick Hodge
The ethanol boom has come and gone. But if you think the opportunity to profit from biofuels has come and gone as well, you're sorely mistaken.
You see, corn-based ethanol turned out to be a bust for many reasons. Its feedstock was in direct competition with food sources, its lifecycle carbon reduction was constantly in question and the energy return on energy invested (EROEI) turned out to be less than desirable--meaning the net energy produced was hardly more than the energy used to produce it.
Of course, with all the heavy capital expenditures that went into developing a corn-based ethanol market, we'll continue to see that product produced. Especially since federal mandates require a certain amount of ethanol to be present in the nation's gas tanks.
In fact, right now there are 139 ethanol biorefineries operating in the US with a capacity of 7.9 billion gallons per year (bgy). Also right now, there are 62 plants under construction and seven expansions underway that will bring an additional 5.57 bgy online.
That gives the US a total projected capacity of over 13.5 bgy.
But the recent energy bill signed into law on December 19, 2007 calls for the blending of 36 bgy of domestic alternative fuels to be blended into our nation's fuel supply by 2022.
Basic math tells me there is a 22.5 bgy discrepancy. Sounds like an opportunity, right?
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Cellulosic Ethanol Production
According to JP Morgan Analyst Marc Levinson, ". . . there is no prospect of producing this much [36 bgy] biofuel from corn in the United States."
That's why the Energy Bill also mandates the production of cellulosic ethanol, a fuel that can be made from the cellulose of many plants, rather than competing with corn. It's the stuff Bush is referring in to when he talks so enthusiastically about switchgrass--though it can be made from many sources.
The Energy Bill requires that 3% of ethanol be derived from cellulosic sources by 2012, and 44% by 2022. That means, by my estimates, we'll need to produce 405 million gallons of cellulosic ethanol in 2012 and 15.84 billion gallons in 2022.
I'd consider that a heck of an opportunity, especially since construction only recently began on the first cellulosic pilot plants in the nation. This is truly a ground floor opportunity.
According to consultants McKinsey & Co., "If the 2022 mandate is met, it could let corn ethanol producers reach a production ceiling that does not threaten food prices, while providing them and cellulosic producers revenues of about $50 to $70 billion."
Of course, I believe the cellulosic industry will be the biggest beneficiary. But, until recently, the industry was shrouded in doubt about whether or not it was profitable, how much it actually reduced lifecycle carbon emissions, and even it could be produced on a mass scale.
Now, reports are coming out that ease all those fears.
Bill Caeser, an analyst from McKinsey & Co. says cellulosic ethanol can become commercially available by 2015. And POET, a private ethanol company, hopes to be making commercial amounts of it by mid-2012.
Caeser also said cellulosic could boost the percentage of energy from ethanol in US transportation fuel to about 16% by 2022, up from current levels of about 3% from ethanol made from corn. That could save the United States 1.5 million barrels of oil per day.
You see, ethanol does not contain as much energy per gallon as gasoline, so its contribution to energy supplies is often measured in energy content rather than volume. Some have even said that it takes a gallon of gasoline to make a gallon of biofuel.
But a new study from plant scientist Ken Vogel found cellulosic ethanol actually has positive net energy yield. In a study for the federal government's Agricultural Research Service in Nebraska, Vogel calculated all the energy that went in to producing cellulosic ethanol.
According to Vogel, the study included, "the energy used to make the tractors, the energy used to make the seed to plant the field, the energy used to produce the herbicide, the energy used to produce the fertilizer, [and] the energy used in the harvesting process."
His results?
For every unit of energy used to grow the feedstock, Vogel says he could get almost 5.5 units worth of ethanol. That's even more efficient than making ethanol from corn.
And cellulosic ethanol emits far less carbon dioxide, the main greenhouse gas, than corn-based ethanol. Cellulosic emits 80% less carbon dioxide than regular gasoline, while corn-based ethanol emits only 20 % less.
With so many benefits, there's got to be an investment opportunity.
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Cellulosic Ethanol Companies
While investors in corn-based ethanol companies may have done well early on, there hasn't been anything positive to say about the long-term for some time now. Take a look at the following charts from ethanol frontrunners Pacific Ethanol Inc (NASDAQ: PEIX) and VeraSun Energy Corporation (NYSE: VSE):
cellulosic ethanol company pacific ethanol (NASDAQ: PEIX)
cellulosic ethanol company pacific ethanol (NYSE: VSE)
But the publicly traded cellulosic ethanol companies should prove to fair better. And not just production companies, but chemical companies as well.
In fact, cellulosic ethanol could create a $3 billion to $5 billion industry in enzymes and fermentation organisms, which help break down the tough bits of the plants into fuel.
Companies in the cellulosic sector include Verenium Corporation (NASDAQ: VRNM) and Bluefire Ethanol Fuels Inc. (OTC: BFRE). Both of those companies have received federal funding and should prove to be a good bet going forward.
It would also be wise to look at paper and pulp companies like Domtar Corp. (NYSE: UFS), that could start selling their byproducts as cellulosic ethanol feedstocks.
Beyond the few limited options thus far, I'll be covering every advancement in this industry in the pages of the Green Chip Review.
Until next time,
nick hodge
Nick
PS. After writing this article, an announcement was made that the DOE awarded $114 million in grants to build four small-scale biorefineries. The companies that received those grants were: Pacific Ethanol (NASDAQ: PEIX), Lignol Energy Corporation (TORONTO: LEC), ICM Inc. and Stora Enso North America.
www.greenchipstocks.com
AD. You are right - we need to be cautious in shipping market too. It is a volatile and heavily played market. But if you can play it right, you earn handsomely.
I may seem not so concerned about the fluctuations, and it is because I have bought my shipping shares so long time ago and so cheap that the present up and downs of the share prices do not scare me. And over this long time holding I have learned to trust on John Fredriksen, he has guided his companies safely through many troubles of the shipping industry.
However, I think that the shipping companies themselves are very transparent and easy to follow. The acting of shipping share prices is then another question
Why You Should Care About the Baltic Dry Index
By Simon Constable
TheStreet.com Staff Reporter
1/31/2008 11:30 AM EST
URL: http://www.thestreet.com/university/personalfinance/10401366.html
The Baltic Dry Index measures the cost of moving some raw materials, such as rocks and rice, across the ocean by ship.
Because raw materials are used at the beginning of a production cycle, indices related to moving them are seen as an important bellwether of future economic activity in the real economy. And that's why investors and economists should take care to watch what's happening, although they also need to be careful how they read it.
Changes in Shipping Rates Matter
"It's viewed as an indicator of commercial traffic," says Michael Darda, director of research and chief economist at MKM Partners in Greenwich, Conn. "Shipping rates are viewed as a measure of demand and they are looked at the same way other commodity prices are."
Freight Stocks Good for the Long Haul
Here's how the Baltic Dry Index works and what it means.
The index figure itself doesn't actually mean anything. Rather, changes in the level of the index reflect rising or declining costs for moving dry freight across the oceans.
To derive the figures, each day the London-based Baltic Exchange consults a panel of experts to assess the cost of moving dry freight over a large variety of well-used shipping routes using a number of different classes of ship, some very large and some smaller.
For this index, the Baltic Exchange only looks at ships fitted to carry dry cargoes, such as iron ore, coal, corn, wheat and barley. Finished goods, such as air-conditioners and refrigerators, are moved more often by container ship, while oil is hauled by tanker.
Prices for the freight can shift wildly between periods. That's because, while demand for freight space ebbs and flows, the supply of available ships doesn't change markedly, and new ships can take a couple of years to build.
The Baltic Dry Index and Emerging Markets
The phenomenon of demand outstripping supply has been particularly prevalent over the past few years as fast growing economies in Asia and the Southern hemisphere have gobbled up materials in the quest for economic growth.
Joe Brusuelas, chief U.S. economist at IDEAglobal in New York, cautions that the index shouldn't be used in isolation to assess what is happening in the global economy. But he says it's still useful.
"It's a decent proxy to interpret growth in emerging markets," he says and notes the index is very volatile.
The Baltic Dry Index and Freight Stocks
It's not only economists and stock-market strategists who look at the Baltic Dry Index.
Some analysts closely follow the stocks of freight shipping firms, such as DryShips (DRYS) , Eagle Bulk Shipping (EGLE) and Navios Maritime (NM) .
The fortunes of these companies tend to closely track the Baltic Dry Index, but as with any business, management expertise and company-specific strategies can make a big difference to how well a stock performs.
To learn more about the Baltic Exchange and its Dry Index, visit the official Baltic Exchange Web site.
GM Stuffit. The time difference between us is a nuisance - I fall asleep when you start discussing, and when I wake up, you fall asleep. During the trading hours I do not have much to say. Oh well.
Anyway, it's nice we can change messages here and on the Lotto-board :)
The earnings release time is approaching, and it will be very interesting to see how the shippers have managed through the rate declines. Horizon Line's (HRZ $18.91, container ships, port terminals)announces a dividend:
Horizon Lines, Inc. Declares Dividend; Announces 2008 Annual Stockholder Meeting
Thursday January 31, 3:32 pm ET
CHARLOTTE, N.C., Jan. 31 /PRNewswire-FirstCall/ -- Horizon Lines, Inc. (NYSE: HRZ - News) announced that its Board of Directors has voted to declare a cash dividend on its outstanding shares of common stock of $0.11 per share, payable on March 15, 2008 to all stockholders of record as of the close of business on March 1, 2008.
The company also announced that it will hold its 2008 Annual Stockholder Meeting on Tuesday, June 3, 2008 in Charlotte, North Carolina. Stockholders of record at the close of business on April 3, 2008 will be entitled to notice of and to vote at the meeting.
About Horizon Lines
Horizon Lines, Inc. is the nation's leading domestic ocean shipping and integrated logistics company comprised of two primary operating subsidiaries. Horizon Lines, LLC operates a fleet of 21 U.S.-flag containerships and 5 port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. Horizon Logistics Holdings, LLC offers customized logistics solutions to shippers from a suite of transportation and distribution management services designed by Aero Logistics, information technology developed by Horizon Services Group and intermodal trucking and warehousing services provided by Sea-Logix. Horizon Lines, Inc. is based in Charlotte, NC, and trades on the New York Stock Exchange under the ticker symbol HRZ.
Same thing over here in Europe. People are drawing their money out of suspicious banks (and there are many of them), and do not much appreciate the whole financial industry.
Look at Google tonight. Stock analysts had expected revenues of 4.83 BILLION and poor Google successed to rake in only 4.827 BILLION, only 51% more that the quarter before. IL GRANDO CATASTROFO!! The price dropped 10%.
Where did the analysts get their numbers? Were their numbers perhaps wrong? Are they allowed to be unproportionally too optimistic?
I think their predictions are given far too much attention.
Me too. I use 3 washing programs of its 11 programs and am quite happy with the results. Who's to blame?
Yes Teapeebubbles. He is a savvy investor. I appreciate his common sense and his ability to see the forest from the trees (or how do you say it).
(And I appreciate especially when he says that he is a lousy trader too...lol, but I'm not quite sure if I buy that...)
Jim Rogers is a straighttalking man too. I saw him talking in TV (CNBC Europe show), and he said that if a recession is coming (and it is coming because everybody says so) let it come and clean the table, and after that the economy can start humming along again. It takes too long time to try to push it further with a series of rate cuts and printing more money for a "soft landing". After all that the recovery takes much more time.
I agree.
A-ha. He may be a too straight talking man for a president. That's why I think Jim Rogers supports him.
OT OT. Is Ron Paul a candidate running for president? Where? Democrat or Republican? I never hear about him in news.
Here's a video where Jim Rogers is telling he would like to support Ron Paul (but says if he supports Ron Paul, this will never make it :)
Me thinks the big shipping CEOs know their business pretty well. What the stock market knows and how it behaves is totally another question in the shipping world...lol
Dry bulk CEOs bet on strong year despite recession fears
Thu Jan 31, 2008 7:36am EST
By Sakthi Prasad
BANGALORE, Jan 31 (Reuters) - Demand for dry bulk shipments will remain strong this year despite a recent crash in freight rates, growing fears of a U.S. recession, a weak dollar and high oil prices, chief executives of four major dry bulk carriers said at an industry forum on Wednesday.
Demand from China and other emerging economies will offset falling freight rates, the CEOs of DryShips Inc (DRYS.O: Quote, Profile, Research), Star Bulk Carriers Corp SBLK.O, TBS International (TBSI.O: Quote, Profile, Research) and Quintana Maritime Ltd (QMAR.O: Quote, Profile, Research) said at the Dry Bulk CEO Virtual Forum.
The Baltic Exchange's chief sea freight index for dry commodities .BADI, which monitors major trade routes for coal, iron ore, cement and soft commodities such as grain and sugar, lost about 47 percent, since hitting a life high of 11,039 in November last year.
George Economou of DryShips said the profitability would not be affected due to recent fall in freight rates.
"On average, a capesize vessel would be getting $90,000 a day and the expense is about $6,000 a day and there is a huge margin" he added.
Dry bulk freight rates had touched record highs last year, reaching $200,000 levels for capesize vessels, on strong demand from China and other emerging economies and also due to tight supply of vessels.
Quintana's Chief Executive Stamatis Molaris said Baltic Dry Freight Index is an indicator of spot rates only and does not reveal the future freight rate movements.
"It has nothing to do with the real and underlying fundamentals of our business in the long term and volatilities is also part of dry bulk business in the long term," he said.
Molaris also emphasized there is no change in the fundamentals and investors should not use the index to draw long-term conclusions but could use it as a short term trading instrument.
"The fundamentals are still good for 2008, 2009 and beyond and you will see new routes developing," Economou of DryShips said.
"Even if the U.S. economy slows down significantly we are not likely to see much effects in our business," Quintana's Molaris said at the conference organized by New York-based investor relations and financial communications firm Capital Link and Nasdaq International.
Besides recessionary fears, dry bulk freight rates have been hit this year by a lack of fresh cargo supply at two key global export centers and China's ongoing price negotiations for iron ore.
"The demand has been surprising us favourably in the past and we will see it again, said Chief Executive Akis Tsirigakis of Star Bulk.
OIL, DOLLAR AND SUB-PRIME
The belief that rising oil prices can eat into a shipper's margins was dispelled by Tsirigakis, who clarified that oil is not part of a shipper's cost structure.
"The oil costs are passed on to the charterers and is not part of our cost structure and hence it do not affect us," he said.
Joseph Royce of TBS International said he is continuing to see increasing exports, especially of coal and agricultural products, from the U.S., as they become cheaper due to a weaker dollar.
Royce also added that infrastructure development, which in turn propels demand for dry bulk commodities like iron ore and coal, would continue as project business is booming throughout the world.
Economou of DryShips said the sub-prime mortage-led credit crunch has not affected the companies' operations.
"The only way we are suffering from credit crunch is in the price of the stocks, which has been unnecessarily hurt.
"The fundamentals have not changed and deals are going to be there and you saw one announced yesterday," he said, refering to Excel Maritime Carriers Ltd (EXM.N: Quote, Profile, Research) $2.45 billion buyout of Quintana Maritime.
Quintana's Molaris said his company's sale to Excel Maritime is a huge confidence booster to the shipping market and that right projects will always be financed.
VESSEL SUPPLY
Dry bulk carriers have ordered more ships to meet the growing demand to ship dry bulk commodities to China, India and other emerging economies, which is expected to hit the seas in the next two to three years.
Molaris said the rise in the orderbook to build new ships was spurred by the booming demand and admitted he was sceptical about the rising supply of ships but added that shipyards are constrained with orders.
"We are currently experiencing delays in delivering ships on time from well established shipyards," he said. (Reporting by Sakthi Prasad in Bangalore; Editing by Jarshad Kakkrakandy)
Yep. It's divvy time!
BDI up 152 points to 6052. Negotiations about iron ore prices (China/Australian and Brazilian producers) have moved ahead.
Capesize: +456 til 8766 = +6582 USD til 100.397 USD/dagen
Panamax: +163 til 5686 = +1280 USD til 45.682 USD/dagen
Supramax: -43 til 3860 = -450 USD til 40.358 USD/dagen
Handysize: -65 til 1988
Some fixtures 31.1.2008:
Capesize: Mineral Monaco 180.263 dwt built 2005 Caofeidian/Worldwide 29/31 Jan. 5 months $ 105.000 daily
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Panamax: Alpha Future 72.893 dwt built 1999 Rotterdam/ China 31 Jan. $ 56.500 daily
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Panamax: Giovanni 72.394 dwt built 1996 ARA/Worldwide 15/20 Feb. 23 months $ 54.000 daily
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Supramax: Jin Hai 55.450 dwt built 2006 Tian Jin/Spore-Jpn-Rge 7/9 Feb. $ 27.000 daily
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Lol. Good night folks. Laughing all the way to my bed.
I could send you their yearly clasroom magazin, where their findings are published, but first you have to take a course in Finnish! (I guess that's no problem)
Lol. The Pope surely knows what money is...
Well, the kids didn't tell me that. Must look in a history book.
The schoolkids know more than we can imagine.
So they say. In medieval Paris the traitors were executed with a gelatine.
The Pope lives in Rome in Vacuum.
Don't know for sure, but I know Adam and Eve lived in paris.
Schoolkid knowledge:
The Bible of the Moslems is called Kodak.
An American in Rome: "Veni, Vidi, Visa"
FYI: Schlumberger Acquires Raytheon Technology for Oil Extraction from Oil Shale and Oil Sands.
A new oil extraction method from oil sands/shales again developed! Oilsands oil is becoming more economic. Some highlights:
- For tar sands and heavy oil, the Raytheon process could yield 10 to 15 barrels of oil equivalent per barrel consumed, due to the lower heating temperatures required. Raytheon earlier estimated that the technology would retrieve four to five barrels of oil for every one barrel invested. Other in-situ processes retrieve one and a half to three barrels of oil for every barrel consumed estimated.
- The use of RF technology in shale processing would enable the fuel to be extracted from the earth in only one to two months. In-ground heating methods that do not employ radio waves, by contrast, require three to four years to replicate the natural conversion process.
The whole article:
Schlumberger Oil Extraction from Oil Shale /Jan 23 2008
Schlumberger Acquires Raytheon Technology for Oil Extraction from Oil Shale and Oil Sands
23 January 2008
Radio Frequency / Critical Fluid Oil Extraction Technology. Click to enlarge.
Schlumberger, a leading oilfield services company, has acquired Raytheon’s technology for the extraction of oil from oil shale and oil sands. Financial details of the transaction were not disclosed.
The technology, developed by Raytheon and partner CF Technologies for oil shale processing, combines radio frequency (RF) technology from Raytheon with critical fluid (CF) technology from CF Technologies. (Earlier post.) Raytheon has projected that the same process could also be used to retrieve oil from Canadian oil sands and to reprocess spent wells.
Field experience indicates that the Raytheon RF heating technique obtains recovery rates of 75% of the oil shale’s Fisher Assay value. (A method used to approximate the energy potential of an oil-shale deposit.) Coupling RF heating with the CF technology has resulted in recovery rates as high as 90 to 95%.
Critical fluids, or supercritical fluids (SCF), are liquids or gases used in a state above their critical temperature and pressure (critical point). In this state, the SCF has unique properties different from those of either gases or liquids, offering a combination of liquid-like density and solvency, with gas-like viscosity, diffusivity, compressibility and lack of surface tension.
As a result, supercritical fluids can rapidly penetrate porous and fibrous solids, offer good catalytic activity and can dissolve and extract a wide range of chemicals. Carbon dioxide is commonly used as a supercritical fluid.
Under the oil shale extraction scenario, oil well holes are drilled into the shale strata using standard oil-industry equipment. RF antennae, or transmitters, are lowered into the shale. The antennae then transmit RF energy to heat uniformly the buried shale rock. This results in the volatilization of water, which, in turn, results in the microfracturing of the formation, enhancing product recovery.
Samples of kerogen extracted from oil shale with the RF/CF process. Click to enlarge. Credit: Raytheon
Supercritical carbon-dioxide fluid is then pumped into the shale formations to separate the petroleum from the rock and direct the freed fuel to another well, where it is extracted. Next, the carbon-dioxide fluid is separated from the oil and gas, which is sent to a refinery and further processed into gasoline, heating oil and other products. Ultimately, a self-sequestration approach is expected to yield a neutral carbon foot print for process operations.
The RF/CF combination is more economical and environmentally responsible than older oil shale extraction techniques as it uses less power, does not severely disrupt the landscape or leave behind residue that can enter groundwater supplies.
Raytheon earlier estimated that the technology would retrieve four to five barrels of oil for every one barrel invested. Other in-situ processes retrieve one and a half to three barrels of oil for every barrel consumed estimated.
For tar sands and heavy oil, the Raytheon process could yield 10 to 15 barrels of oil equivalent per barrel consumed, due to the lower heating temperatures required. When applied in tar sands, the combined RF/CF technology performs a mild upgrading in-situ, yielding an attractive light sweet crude oil. The process is “tunable”, facilitating production of various product slates.
The use of RF technology in shale processing would enable the fuel to be extracted from the earth in only one to two months. In-ground heating methods that do not employ radio waves, by contrast, require three to four years to replicate the natural conversion process.
Raytheon’s RF technology was commercially proven for oil shale applications in the 1970s. Since then, the company has continued to perfect the technology, focusing on antenna design and system integration.
Eye on bunkers.
“That leads us to our top pick for 2008, which is a GM Marine --ticker, ANW (NYSE:ANW $31.83 - News). A bunkering tanker refuels ships so they’re not really transporting cargos or commodities, they’re refueling ships. And when you look at the shipyard delivery schedule for the next few years of crude tankers, dry bulk vessels, container ships, there will be a lot more ships delivered. The global fleet should increase in size by 45% and so with that increase in global fleet size as well as the number of bunkering tankers likely leaving the fleet to regulatory reasons in 2008, we think a GM Marine is in good shape to take advantage of those fundamentals.”
Doug Mavrinac, Jefferies Maritime Group Research Head