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Seadrill SDRLF.PK 3Q results EPS $0.08 NET $38M REV $377M. Not bad at all when you think that only 2 big semisubmersibles and 4 jackups working for them now.I expected still negative EPS.
Four new semis and 2 new ultra-deep drillships will be delivered in 2008 - and they are ALL in schedule, very important - so the income begin to flow in in 2008-2009. CEO Jacobsen says the new rigs will be rented on shorter contracts (spot) to benefit from the present high oil drilling season. Good start for 2 years old Seadrill.
SDRL - Seadrill reports third quarter 2007 results
Published: 16:38 29.11.2007 GMT+1 /HUGIN /Source: Seadrill Limited /OSE: SDRL /ISIN: BMG7945E1057
Highlights
Seadrill reports net income of US$32.8 million and earnings per share of US$0.08 for the third quarter of 2007
Seadrill remains on track for delivery of the newbuild program
Seadrill takes successful delivery of one jack-up and one tender rig
Seadrill secures new contract for the mid-water semi-submersible rig West
Alpha
Seadrill secures new contracts for the ultra-deepwater units West Aquarius
and West Capella
Seadrill OTC-list the well services division as an independent well services
company (fourth quarter 2007)
Third quarter results
Seadrill today reported consolidated revenues for the third quarter 2007 of
US$377.1 million compared to US$374.0 million for the second quarter 2007.
Operating profit for the third quarter was US$96.2 million as compared to US$76.9 million in the second quarter.
Operating profit from the Mobile units (including jack-ups) amounted to US$58.8
million as compared to an operating profit of US$43.3 million in the second quarter. The increase was mainly due to improved utilization for several of the jack-ups in Asia.
Operating profit from the Tender rigs amounted to US$25.6 million as compared to US$22.2 million in the second quarter. The increase was mainly due to improved utilization and operating margins for tender rig T8 and semi-tender West Setia.
Operating profit from Well services amounted to US$11.9 million, marginally up from US$11.4 million in the second quarter.
Net financial items for the third quarter resulted in a net expense of US$ 54.3 as compared to expenses of US$21.8 million in the second quarter. The result is due to increased interest expenses due to higher debt as well as foreign exchange differences due to weakening of US dollar compared to Norwegian kroner.
Income before income taxes amounted to US$41.9 million.
Income taxes were US$5.0 million.
Net income for the quarter amounted to US$32.8 million.
Earnings per share were US$ 0.08 for the third quarter.
For further information, please see the third quarter 2007 report attached.
Analyst contact:
Jim Dåtland, Vice President Investor Relations, Seadrill Management AS
+47 51 30 99 19
Media contact:
Trond Brandsrud, Chief Financial Officer, Seadrill Management AS
+47 51 30 99 19
Seadrill Limited
Hamilton, Bermuda
November 29 2007
Third quarter 2007 report
GM Wildbill. Yep. No dividend dip. Looking forward to possible news of sales of Independent Tankers Corporation (ITC). Could use some additional dividend :)
(Me greedy, eh?? Can't help it, have got so used to get more more more from FRO :)
Good morning Stock Lobster. Just keeping an eye on Calpine. If they manage through the bankruptcy court they have something to sell immediately: electricity. It wouldn't take long it could be a fully running power company, and they usually do fairly well.
ANW $38.55 Aegean Marine Petroleum Network Inc. Further Expands Marine Fuel Logistics Infrastructure with Two Bunkering Tanker Newbuildings
Tuesday November 27, 4:15 pm ET
PIRAEUS, Greece, Nov. 27 /PRNewswire-FirstCall/ -- Aegean Marine Petroleum Network Inc. (NYSE: ANW - News), an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea, today announced it has further expanded its marine fuel logistics infrastructure with two newly built double-hull bunkering tankers of approximately 4,600 dwt each from Fujian Southeast Shipyard in China. The Serifos, which was delivered on November 20, 2007, will operate out of the Company's Singapore service center and the Kithnos, which is expected to be delivered on November 30, 2007, will be deployed to Aegean's service center located in the United Arab Emirates.
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E. Nikolas Tavlarios, President, commented, "We are pleased to once again expand our marine fuel logistics infrastructure with the Serifos and the Kithnos. Including these two high-quality bunkering tankers, Aegean will have taken delivery of three double-hull newbuildings in 2007 and four bunkering tankers that were acquired in the secondary market earlier this year. During a time when we significantly enhanced our delivery capabilities, Aegean has expanded its global network of marine fuel service centers in 2007 by penetrating new markets in Northern Europe as well as the United Kingdom and West Africa, which are scheduled to commence operations in the current fourth quarter. Management's ability to continue to execute Aegean's well-capitalized growth plan bodes well for our Company to further meet the growing demand for an integrated marine fuel solution and increase sales volumes over both the near term and long term."
http://biz.yahoo.com/prnews/071127/nytu120.html?.v=101
GM Stuffit. Dry Bulk Shippers Ride The Wave
Ruthie Ackerman, 11.28.07, 4:45 PM ET
Anchors aweigh!
Dry bulk shippers are riding a wave of positive sentiment on Wall Street Wednesday, a welcome relief after last week’s cancellation of 20 shipments of iron ore because of port congestion.
Dry bulk rates in the forward market have spiked over the last few days, increasing 10% on Wednesday alone. For 2008, the average forward spot rate on Cape size ships, the largest vessels, is predicted to be $125,000 per day. On Tuesday, the forward spot rate was $115,000 per day. The current spot rate on Cape size ships is $172,000 per day.
Last week, Companhia Vale do Rio Doce, the Brazilian mining company, delayed approximately 20 iron ore shipments from two ports. Cantor Fitzgerald analysts said that caused a lot of weakness in the Cape size rates last week because it took demand for the dry bulk ships out of the market. Wednesday’s jump in dry bulk shipping stocks may be a rebound from last week’s disruption.
Dry bulk stocks have been slammed over the last few weeks because of volatility in both the freight rates and the market in general. But analysts say the fundamentals of dry bulk shippers remain strong, making the downward pressure on the stock price a good buying opportunity.
The last 12 months have seen enormous gains in the shipping industry as a whole as steel production and demand for raw materials in China has soared. (See “Dry Shipping On The Rocks?”) As more ferry loads of coal, steel, grains and other commodities have been chartered it has caused upward pressure on shipping costs. That’s good news for the dry bulk shipping industry, which has seen even its worst stocks skyrocket as much as 150% in the last year. (See "Dry Bulk Shippers Bounce Back")
As spot rates soar the companies with the most exposure saw their stocks jump the most Wednesday. DryShips, which has almost all of its vessels on spot contracts, saw its stock shoot up 14.9%, or $11.28, to $86.97 at the close. Excel Maritime Carriers, which has about half of its ships exposed to spot rates, skyrocketed 18.7%, or $7.78, to $49.50. Eagle Bulk Shipping has a lot more long-term contracts and saw its stock jump 7.4%, or $1.87, to $27.04.
Transcript of CEO Dry Bulk Forum Available at www.CapitalLinkShipping.com
Wednesday November 28, 11:16 am ET
http://biz.yahoo.com/iw/071128/0333418.html
HERO $25.26 Hercules to Sell 9 Land Rigs
Tuesday November 27, 8:46 am ET
Hercules Offshore, Focusing on Shallow-Water Drilling, Sells Former Todco Land Rigs
HOUSTON (AP) -- Hercules Offshore Inc., which operates a fleet of oil drilling rigs, said Tuesday it will sell its nine land rigs and related assets for $107 million.
The rigs will be bought by Petrex Sudamerica Sucursal de Venezuela SA and Saipem Perfuracoes e Construcoes Petroliferas Lda.
The sale -- which includes six rigs in Venezuela, one in Trinidad and two in the United States -- is expected to close in the fourth quarter.
The fleet was formerly owned by rival Todco, which the company acquired in July.
The company said the sale is part of its strategy to focus on shallow water oilfield services.
Hercules operates a fleet of 33 jackup rigs, 27 barge rigs, 65 liftboats, three submersible rigs, one platform rig and a fleet of marine support vessels operated through a subsidiary.
ATW $74.90 Atwood Oceanics 4Q Profit, Sales Jump
Wednesday November 28, 5:29 pm ET
Atwood Oceanics Reports Higher Profit and Sales in 4th Quarter, Fiscal 2007; Beats Estimates
HOUSTON (AP) -- Offshore oilfield service provider Atwood Oceanics Inc. said Wednesday its fourth-quarter and fiscal 2007 profit surged on higher revenue to beat Wall Street expectations.
Net income for the three months ended Sept. 30 rose to $54.1 million, or $1.69 per share, compared with $23.2 million, or 74 cents per share, during the same period a year earlier.
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Revenue increased to $121.6 million, from $81.8 million.
Analysts polled by Thomson Financial forecast earnings of $1.43 per share on revenue of $116 million.
For the full fiscal year, the company said net income increased to $139 million, or $4.37 per share, compared with $86.1 million, or $2.74 per share, the previous year. Revenue rose to $403 million from $276.6 million the prior year.
Analysts predicted fiscal 2007 earnings of $4.19 per share on revenue of $393 million.
Separately, the company said its Atwood Southern Cross drilling rig received a contract from Italian energy company Eni SpA AGIP to drill two wells, with options for two more, at a daily rate of $406,000. The project is expected to take 150 days, with a possible extension of 90 days, likely beginning in February.
Atwood shares jumped $3.30, or 4.4 percent, to $78.20 in aftermarket trading.
RIG $136.38 Transocean, GlobalSantaFe Complete Deal
Tuesday November 27, 5:34 pm ET
By John Porretto, AP Business Writer
Transocean, GlobalSantaFe Complete Combination; Fitch Downgrades Company
HOUSTON (AP) -- Transocean Inc., the world's largest offshore drilling contractor, got even bigger Tuesday as it closed a multibillion-dollar deal for smaller competitor GlobalSantaFe Corp., creating a company able to drill globally from shallow to ultra-deep waters.
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One credit-rating agency immediately downgraded Transocean, citing in part the large debt it assumes as part of the transaction.
The deal, announced by the Houston-based companies in July, includes a $15 billion cash payout to shareholders of both companies funded through a bridge loan. The value of the new company is about $60 billion, including roughly $18 billion in debt.
It retains the Transocean name and trades on the New York Stock Exchange under Transocean's symbol "RIG."
Fitch Ratings downgraded Transocean from "BBB+" to "BBB" -- two notches above "junk" status. Among the concerns Fitch cited were the $15 billion payout and the possibility future acquisitions could reduce cash flow and extend debt repayments. Standard & Poor's, meanwhile, affirmed its "BBB+" rating.
Despite the downgrade, Transocean shares rose $6.36, or nearly 5 percent, to close at $135.75 Tuesday after hitting an annual high of $137.59 earlier in the day.
On Monday, U.K. regulators gave their approval to the deal after the companies agreed to sell two GlobalSantaFe rigs in the North Sea to resolve antitrust concerns.
"Even without these two floaters, the consolidated company will remain the dominant player in the offshore drilling universe," Raymond James & Associates said in a research note Tuesday.
Analysts have said Transocean's new girth could lead to other combinations in the industry.
The combined company has 140 mobile offshore drilling rigs, including harsh-environment jackups for shallower waters and ultra-deepwater drillships. It has eight additional ultra-deepwater rigs under construction.
Transocean Chief Executive Robert Long, who will continue as CEO of the combined company, has said the deal allows the company to keep pace as the industry expands and assures it of a leading presence in almost every major offshore drilling province in the world.
It also gives Transocean a broader customer base, particularly with state-owned national oil companies, which control almost 90 percent of global oil reserves, and greater exposure in the growing and lucrative deepwater drilling market.
Under terms of the deal, Transocean shareholders will receive $33.03 cash and 0.6996 shares of the combined company for each share of Transocean they own. Shareholders of GlobalSantaFe will receive $22.46 cash and 0.4757 shares of the new company for each share of GlobalSantaFe they own.
There will be about 316 million shares outstanding of the combined company after the transaction.
GM Stuffit. GDOCF.PK
Published: 09:18 27.11.2007 GMT+1 /HUGIN /Source: Golden Ocean Group /OSE: GOGL /ISIN: BMG4032A1045
GOGL - Dividend information
We refer to the third quarter report released on November 14, 2007. Golden Ocean Group Limited will be trading ex-dividend of a cash dividend of $0,50 per share on November 28, 2007. The record date is November 30, 2007, and the dividend will be paid on or about December 12, 2007.
Oslo, November 27, 2007
PRGN $17.76 - a drybulk company
Paragon Shipping Inc. Takes Delivery of Its Tenth Vessel
Monday November 26, 4:39 pm ET
http://biz.yahoo.com/bw/071126/20071126006045.html?.v=1
TOPT $3.85 TOP Tankers Announces Public Offering of Common Stock and Cessation of Offers Under July Prospectus Supplement
Monday November 26, 4:12 pm ET
http://biz.yahoo.com/prnews/071126/lam091.html?.v=101
GM Stocklobster. CPNLQ.PK $0.70 Shareholders and the creditors are quarrelling, if this 0.70/share company is worth $16.2 BILLION or $23.2 BILLION. This should be solved in a meeting end of November.
http://biz.yahoo.com/ap/071121/calpine_bankruptcy.html?.v=1
GM Wildbill. "Frontline, the world's biggest crude oil tanker fleet operator, has ridden a wave of success by converting some of its oil-carrying ships to other uses and selling other vessels for big profits."
FRO converted two of its VLCCs to FSOs (Floating Storage and Offloading) a couple of years ago before the previous sharp oil price spike. That means "Big Wulf" bought two big tankerloads of oil, chartered those two FSOs of Frontline, parked the ships to wait for better prices, and sold the oil at very good profit.
The analysts seem to have difficulties to keep up with JF's speed.
Dividend ex-day (Nov. 26) is approaching, it can be seen from the chart.
Lady-baron. Thank you for the link. That is really needed information. I'm sure I will now note the news about this trouble quite differently.
Oh no! There you see how much we know about each other in the European Union. I know I have heard something about the different opinions of Flemish and Walloon people already a long time ago, but never thought that it was something serious.
I guess we have to content with the common currency and some kind of cooperation within some sectors (banking), but I cannot see Europe as a truly economic union.
GM Wildbill. Why are you not joining my optimism? From this side of the pond it feels like anybody else than the present one would go well...er.. at least for us.
GM Stock Lobster. "How do you unite 15 nations with different backgrounds, who are at different phases of economic growth and sophistication?"
That's the problem in Europe, even bigger than a strong Euro. How do you keep good consensus in managing common affairs in a district, where part of the countries (Italy, France, Portugal and soon Spain) are yelling for lower interest rates, and part of the countries (Finland, Deutschland, Baltic countries) are demanding present or higher rates to slow down the unproportional overheating of the economies and inflation. It has always been said that a strong currency = a strong state, and it worked with USA and Germany a few years ago. Even if you could not compete in product prices, a strong currency drew foreign capital into the country to help the economy and the domestic demand. But usually the foreign currency had something concrete to collaterate or back it. What about now? How big part of the "easy money" flowing now around has true value, if the music stops and chair is to be found. I think something like that is now happening.
I think too that, as you say, dollar is being boycoted very broadly (not only in Arabic countries), and that is very much because of Mr. Bush and his policy. I hate to say but this boycott is directed to him. Not so much for Wall Street guys (they have always friends all over) or housing bubbles (I red somewhere that it is some 7% of USA's GDP). Maybe some foreign funds and banks are angry too when they fell in buying those SIVs and CDs and subs and innovative derivatives - not apparently caring to look what they really were buying.
Maybe when the new president candidates have been found and accepted, the tide begins to turn
Hello Lady-baron. How serious you think these news about the possible split of Belgium in two countries are? I live in Finland, and our Europarlament members seem to be very concerned about it.
It feels so unbelievable, Belgium has always been Belgium!
Here is one junior mining company (gold, copper, zinc, molybden) with good fundamentals, which looks like it has arrived to the next level Exploration II: Terrane Metals TRX.V 0.41.
A comprehensive report titled: "One of the Most Undervalued Juniors Ready to Leap to the Next Level"
(Certainly not the only one in this wide world, but as far as I understand they have good resources to become a real producer.)
http://www.resourcestockguide.com/home_page.php?hpc=15&nid=2740
Have you found any oil sands companies that interest you? I know BQI has a long long way to go before much profit of my investment, but most important to me in BQI is that the management really seems interested in bringing the company into a producing oil sands company, and not only pocketing money for the managers.
Here's one list of names of oil sand companies I found somewhere (of course don't remember where. Sigh.)
ALBIAN SANDS ENERGY INC.
CANADIAN NATURAL RESOURCES LIMITED
CANADIAN OIL SANDS LIMITED PARTNERSHIP
CANADIAN OIL SANDS TRUST
CHEVRON CORP
CONNACHER OIL AND GAS LIMITED
CONOCOPHILLIPS
DEVON ENERGY CORPORATION
DIAMONDEX RESOURCES LTD.
ENCANA CORPORATION
ENERPLUS RESOURCES FUND
EXXON MOBIL CORP
HUSKY ENERGY INC.
IMPERIAL OIL LIMITED
JAPAN CANADA OIL SANDS LIMITED (JACOS)
MEG ENERGY CORP.
MICRON ENVIRO SYSTEMS INC
MOCAL ENERGY LTD.
MURPHY OIL CORP
NEXEN INC
OILSANDS QUEST INC.
OPTI CANADA INC.
PAN ORIENT ENERGY CORP.
PENN WEST ENERGY TRUST
PETRO-CANADA
PETROBANK ENERGY AND RESOURCES LTD.
SHELL CANADA LIMITED
SINOPEC CORP.
SUNCOR ENERGY INC.
SYNCRUDE CANADA LTD.
SYNENCO ENERGY INC.
TALISMAN ENERGY INC.
TECK COMINCO LIMITED
TOTAL SA
UTS ENERGY CORPORATION
WESTERN OIL SANDS INC.
Euro has risen absolutely too high. Of course we have some benefit from it by not paying so much for the oil, but if the German exporters (autos, machinery, pharmaceuticals) and their engineers cannot compete now with prices versus mainly USA, Japan and South Korea, but more and more versus the BRIC (Brazil, Russia, India, China) countries, so what's then left? I think with this level of Euro, Germany cannot compete for long. But for how long - one quarter, one year, 2 years? Complainments of thinning orderbooks have already been issued from manufacturers towards the Central Bank.
There are serious troubles between workers and the governement in France, and the troubles are beginning to spread all over Europe, also to the private sectors. People = workers do not like globalization (which takes their jobs) like their leaders do. Belgium is in danger to split in two countries: the flames and the vallons - imagine that: the founder and the home of the European Parliament is splitting apart on base of fundamental disagreement about the European Union.
Uniting 15-23 countries to support unanimously important decisions for Europe seems impossible. Countries with very different backgrounds, who have been independent from each others for hundreds of years, think very differently of many many things. I think it will finally end as a good try, and the European Union will remain as a bunch of states, where everybody looks after its own benefits, and no consensus in really important questions is even tried to achieve (maybe the propelheads in the European Commission will go on trying, heh). Consensus can be reached in minor questions ("how long are the cucumbres allowed to grow in the European Union area" and such LOL)
The change in text of the European Constitution, where the "unanimosity" was ment to be changed to "majority" in decision making, has raised a storm of protesting from the smaller countries, so no Constitution yet after 25 years of trying. For me, it seems even more unpossible in the future.
Welcome to the Potemkin Village. Europe will keep up with the Jones'es!
So how long will Euro stay in these heights? I have a feeling that it will for short time reach 1.50, but the slide quickly back - everybody knows it is already too high now. Everything seems to happen in faster and faster cyckles in today's economics - is it because of faster information or have the economists learned something from the past, learned how to fasten or shorten the economic cycles, or avoid some phases of the cycle in all?
In their economic growth the BRIC countries have the privilege of learning from the older ones, so their growth can be really fast. Will they learn remains to be seen.
OK thanks. We can discuss this later. You see, according to my logic when there are thousands and thousands of stocks (I even think there are already too much), and there are only four or five currencies to trade... That would suit better for me (lol).
I would be happy if you give us also a forex trading lesson, but later.
Good night and sleep tight! Enjoy the Thanksgiving holiday.
You said that you have also been trading currencies. Can you tell me what forex brokers you have been using in USA?
GM SL. Are you still there? I have a question.
Here's an easy and tasty turkey recipe (tried it many times:)
Step 1: Go buy a turkey
Step 2: Take a drink of whiskey, scotch, or JD
Step 3: Put turkey in the oven
Step 4: Take another 2 drinks of whiskey
Step 5: Set the degree at 375 ovens
Step 6: Take 3 more whiskeys of drink
Step 7: Turn oven the on
Step 8: Take 4 whisks of drinky
Step 9: Turk the bastey
Step 10: Whiskey another bottle of get
Step 11: Stick a turkey in the thermometer
Step 12: Glass yourself a pour of whiskey
Step 13: Bake the whiskey for 4 hours
Step 14: Take the oven out of the turkey
Step 15: Take the oven out of the turkey
Step 16: Floor the turkey up off the pick
Step 17: Turk the carvey
Step 18: Get yourself another scottle of botch
Step 19: Tet the sable and pour yourself a glass of turkey
Step 20: Bless the saying, pass and eat out!
Happy Thanksgiving to everybody! Don't worry too much. Be happy!
Xanadu
Hello Wildbill. Kartsonas from Citigroup has had "sell" on FRO as long as I remember (and that is long), and quarter after quarter Frontline has always disappointed him. Can't help smiling again.
Look at the chart. As I told you, shorters have apparently become more cautious after paying $1.50 dividends quarter after quarter :)
Offshore drilling. As the need for heavy class semi-submersibles, capable to drill 30.000 ft deep, is increasing, take a look at SeaDrill (SDRLF.PK $21.65), a Norwegian deepsea driller. SDRLF has 2 semisubs working now, and has ordered new semisubs two years ago. These new semisubs will be delivered as follows:
1 1Q/2008 30.000 ft
2 2Q/2008 35.000 ft
2 3Q/2008 30.000/35.000 ft
1 4Q/2008 35.000 ft
1 2Q/2010 35.000 ft
In addition SDRLF has ultra-deep drillships:
1 working, 35.000 ft
1 delivery 2Q/2008 35.000 ft
1 delivery 4Q/2008 35.000 ft
1 delivery 2Q/2010 35.000 ft
Look at their fleet status on their website http://www.seadrill.com/
SeaDrill will release its quarterly report on Nov 29. Don't expect yet any fabulous results - much debt - but keep an eye on this one. If the deepsea drilling is important in the future - as it seems with the oil discoveries in Brazil, Angola, Mozambique, India - SDRLF is a bargain now.
The arctic region drilling for natural gas is already a fact, and those rigs are all equipped for "harsh environment".
There are only 40 rigs of this caliber in the world now, and their daily rates have climbed over $500.000/day. Transocean and Diamond Offshore have ordered new semisubs, but due to full orderbooks at the shipyards, those rigs will be delivered later.
Business Week: Read the chapter in bold down in the article.
Top News November 19, 2007, 12:01AM EST text size: TT
Brazil, the New Oil Superpower
State-run Petrobras' "monstrous" new oil find has wide-ranging implications for the South American country, the oil majors, oil services providers, and beyond
by Joshua Schneyer
In a recent radio broadcast, Brazil's President Luiz Inácio Lula da Silva said he's convinced a "higher power" has taken a shining to Brazil. That, he said, might explain the providence of state-run oil company Petrobras (PBR), whose colossal new oil discovery could transform Brazil from a barely self-sufficient producer into a major crude exporter.
Petrobras announced Nov. 8 it has found between 5 billion and 8 billion barrels of light oil and gas at the Tupi field, 155 miles offshore southern Brazil in an area it shares with Britain's BG Group and Portugal's Galp Energy. Tupi is the world's biggest oil find since a 12 billion-barrel Kazakh field was discovered in 2000, and the largest ever in deep waters. Perhaps more important, Petrobras believes Tupi may be Brazil's first of several new "elephants," an industry term for outsize fields of more than 1 billion barrels.
Initially, Tupi will produce about 100,000 barrels a day but may ramp up to as much as 1 million before 2020—more than the biggest U.S. field in Alaska's Prudhoe Bay, says Hugo Repsold, Petrobras' exploration and production strategy manager. "It's monstrous," says Matthew Shaw, a Latin America energy analyst at consultant Wood Mackenzie in London.
Blocking Private Companies
Given the discovery's magnitude, Tupi already is changing how Brazilians think about their oil riches. It even tempts the kind of oil nationalism that has prompted Venezuelan President Hugo Chávez to expropriate oil reserves and production infrastructure in Venezuela from oil majors ExxonMobil (XOM) and Chevron (CVX).
Indeed, a day after Petrobras announced the Tupi discovery, Brazil said it would remove 41 oil exploration blocks, located near Tupi, from an upcoming auction of potential oil fields open to private oil companies. Brazil still plans to offer 271 blocks for bidding, however, the government said it's reanalyzing whether, and how, to share Brazil's new oil riches with private companies, after a decade of relatively open concessions.
Brazilian oil regulator ANP says it's drafting a new oil bill to present to congress that would change energy laws, perhaps limiting the role of private companies in Brazil's subsalt. Additionally, Lula says Brazil should join OPEC once Petrobras begins oil output from Tupi, around 2011.
"This looks to have triggered a major debate about the role of state vs. private oil companies here," says Sophie Aldebert, a director at Cambridge Energy Research Associates. "But Brazil is going to want to continue working with private companies."
A Number of Challenges
Despite its size, the Tupi field poses significant engineering hurdles that will drive increased costs in tapping the field. Petrobras currently pumps 1.8 million barrels daily from its Brazilian fields and expects to boost its $112 billion in planned spending over the next five years to assume the Tupi project.
For one, the oil lies some 4.5 miles beneath the ocean's surface. To reach it, Petrobras will have to run lines through 7,000 feet of water and then drill up to 17,000 feet through sand, rock, and a massive salt layer. A decade ago, geologists lacked the tools to glimpse beneath these salt layers, which can be more than a mile thick offshore Brazil. Today, with the help of data-crunching supercomputers, 3D imaging of ultradeep subsalt layers is illuminating billions of barrels of new oil. Geologists say the discoveries challenge one of the notions of the peak oil theory, which claims oil companies already have found nearly all of the world's usable oil.
Petrobras is already one of a handful of big oil companies, including Royal Dutch Shell (RDSB), BP (BP), Chevron, and ExxonMobil, with vast experience in deepwater drilling. Much of Brazil's oil production is in deep water, but none yet comes from below the salt canopy.
The prized light crude Petrobras is finding may soon place Brazil "somewhere between Nigeria and Venezuela" in terms of proved reserves, Petrobras CEO José Sérgio Gabrielli said last week. Nigeria now holds around three times Brazil's 12 billion barrels of proved oil and gas, while Venezuela has around seven times as much.
In one rough estimate, Petrobras' Repsold says the company might need to drill 100 wells to develop Tupi. Shaw believes that means Tupi may cost between $50 billion and $100 billion to develop. A first well at Tupi cost $240 million and required two years to drill. "But we're getting much faster," Repsold says. Subsequent wells have cost around $60 million apiece and taken six months or less. Petrobras declined to estimate what it will cost to develop Tupi, saying more study and drilling are needed.
"Nobody ever produced oil at these depths," says Cambridge's Aldebert. "Petrobras will do everything in its power to be the first, but any major dip in world oil prices could hurt the plans."
Good News for Oil Services
For now, with oil prices near record highs, the new discovery is good tidings for both Brazil and companies in Texas, headquarters for the industry that builds and leases offshore drilling rigs capable of reaching underneath massive offshore salt, to depths of 30,000 feet or more. Only about 40 such rigs exist in the world today, operated by Texas companies including Transocean (RIG) and its merger partner GlobalSantaFe (GSF), Noble Corp. (NE), Diamond Offshore Drilling (DO), and Pride International (PDE).
Before oil production starts at Tupi, companies that build and service massive offshore oil platforms—from shipyards in Singapore to Texas, and engineering firms and drilling experts such as France's Technip or Houston-based Schlumberger (SLB) and Halliburton (HAL)—may also reap its rewards. If Tupi pumps roughly 1 million barrels a day, it may require five or six of the largest capacity offshore platforms available, which currently cost more than $1 billion apiece. Petrobras' largest offshore platform can now handle 180,000 barrels per day.
Geologist Roberto Fainstein, whose seismic imaging work at oil-field services company Schlumberger helped Brazil to discover its massive new reserves, says the subsalt find will "lead to a rush in this kind of drilling worldwide." Brazil's discovery may quicken subsalt drilling in the Gulf of Mexico by oil majors and Mexico's state-run oil giant Pemex. A salt layer offshore West African countries including Angola, Gabon, and Equatorial Guinea is "virtually identical to Brazil's," Fainstein says, "so companies will race to begin drilling it."
Avoiding the "Oil Curse"
Subsea salt layers are present in all three of the world's biggest offshore oil areas: the Gulf of Mexico, West Africa, and Brazil. So far, subsalt oil production has been executed only in the Gulf of Mexico, near the Texas and Louisiana coast where companies including BP, Shell, ExxonMobil, Chevron, and Anadarko Petroleum (APC) have all made significant discoveries.
In the last decade, private oil majors have invested several billion dollars to find oil offshore Brazil, but none have discovered reserves remotely as large as Tupi. "If Brazil takes its new oil off the table for international oil companies, it will send shock waves through the industry," says Wood Mackenzie's Shaw.
Contrary to the price-hawk position of Venezuelan President Chávez, who recently said oil-producing countries should try to "stabilize" oil prices near $100 a barrel, Lula said he hopes Brazil's new oil will someday help to bring global oil prices down from their current levels, allowing poor countries to buy more of it.
"Brazilians are right to be euphoric," says Peter Hakim, president of Washington-based think tank Inter-American Dialogue. Because Brazil has discovered its new oil after the country's economy has been largely diversified and industrialized, "Brazil can avoid the oil curse, the dependency on one resource that dominates countries like Nigeria and Venezuela."
Schneyer is a special correspondent based in Rio de Janeiro.
GM Stuffit. PDS is a monthly dividend paying trust (look at my previous post):
FYI:
Taking the Plunge with Precision Drilling
posted on: November 02, 2007 | about stocks: PDS/ Jake Berzon, Seeking Alpha
Precision Drilling Trst (PDS) is an income Trust that primarily provides oil and gas drilling services in (yikes!) Alberta, Canada.
So, with all the new taxes and royalties Alberta decided to impose on oil and gas producers, rig day rates on decline, low utilization rates, poor grade oil under their feet and extreme difficulty in getting it out, why would anybody in their right mind want to own this security?
The short answer is that things can't get much worse for PDS at this point and the only way to go is up! However, the longer answer is far more interesting. We have already listed the macro conditions weighing down drillers in Western Canada. What makes this company interesting is, of course, its rather unique set of strengths and the much ignored set of positive market forces. Let's go over my list of top 10 of these briefly:
1. High percentage of variable expenses allows to closely align expenses with revenues and make money even if utilization is very low.
2. Emphasis on high performance teams and equipment, deeper drill depths, extreme operating conditions and safety record ensures best customers and day rates.
3. Recent successful entry into the US market diversifies income base. Look for the company to further geographic diversification in as little as 10 months.
4. The recently acquired portable waste water treatment business, does not currently contribute significantly to earnings, but has much opportunity for growth.
5. Historically, the two "winter" quarters (Q4 and Q1) are higher revenue and more profitable for PDS than the "summer" quarters, due in part to traditional ancillary charges for winter equipment.
6. Customers are currently reserving rigs for winter at a rate very similar to last year. These reservations have no contractual commitment, but imply market conditions above expectations.
7. Most income sources are currently Canada based, which means higher income in $US, as our currency sinks further.
8. Increasing oil prices and natural gas prices (which are expected to increase as cold weather kicks in and demand picks up) should drive up drilling activity in Canada.
9. Alberta scaled down original taxation and royalty plans. New law will not impact drilling in the area as much as was originally feared and will hurt larger companies involved in exploration (PDS's customers) the least. Yet PDS shares are still trading at the level they were before the uncertainty was cleared.
10. Analysts are finally starting to see the light, with Andrew Bradford (a highly accurate EPS forecaster for the industry) earlier in the day coming in with an estimate of .63 cents for Q4, $2.67 for 2008 and upgrading Precision Drilling to a buy.
So, do you know any other companies with long term growth potential, which also pay a 9% dividend while trading at both TTM and believable forward PE of less than 7?! After keeping a close watch on this security for over a month, I finally felt that the opportunity was ripe for taking the plunge.
Disclosure: Author has a long position in PDS
PDS $16.25 Precision Drilling Trust Announces November 2007 Cash Distribution
Tuesday November 20, 12:17 pm ET
CALGARY, ALBERTA--(MARKET WIRE)--Nov 20, 2007 -- (Canadian dollars)
Precision Drilling Trust ("Precision") announced today that the Board of Trustees has approved a cash distribution for the month of November 2007 of $0.13 per trust unit of Precision. The distribution will be payable on December 18, 2007 to unitholders of record on November 30, 2007. The ex-distribution date is November 28, 2007. A cash payment of $0.13 per unit will also be made to holders of Class B limited partnership units of Precision Drilling Limited Partnership using the same record date and payment date.
ADVERTISEMENT
Consistent with prior years, it is likely that a special year-end distribution will be declared for 2007. This special distribution will be announced by December 20, 2007 to effectively flow the Trust's taxable income to unitholders pursuant to the Declaration of Trust.
Cautionary Statement Regarding Forward-Looking Information and Statements
Certain statements contained in this news release, including statements related to a special year-end distribution by the Trust and statements that contain words such as "likely", "could", "should", "can", "anticipates", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995.
These statements are based on certain assumptions and analysis made by the Trust in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to the Trust's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Trust's expectations. Such risks and uncertainties include, but are not limited to: fluctuations in the price and demand for oil and natural gas; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for well servicing, contract drilling and ancillary oilfield services; the effects of weather conditions on operations and facilities; the existence of competitive operating risks inherent in well servicing, contract drilling and ancillary oilfield services; general economic, market or business conditions; changes in laws or regulations, including taxation, environmental and currency regulations; availability of qualified personnel or management; and other unforeseen conditions which could impact on the use of services supplied by Precision.
Consequently, all of the forward-looking information and statements made in this news release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Trust will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Trust or its business or operations. Except as may be required by law, the Trust assumes no obligation to update publicly any such forward-looking information and statements, whether as a result of new information, future events or otherwise.
Precision is Canada's largest energy services trust and a leading provider of energy services to the North American oil and gas industry. Precision provides customers with access to an extensive fleet of contract drilling rigs, service rigs, camps, snubbing units, wastewater treatment units and rental equipment backed by a comprehensive mix of technical support services and skilled, experienced personnel.
Precision Drilling Trust is listed on the Toronto Stock Exchange under the trading symbol "PD.UN" and on the New York Stock Exchange under the trading symbol "PDS".
GE Stock Lobster. What Forex broker are you using when trading the currencies?
Thanks Stuffit. Really interesting read. We discussed the thin film solar companies a while ago, but I can't find the posts and of course don't remember the companies to keep on watch (LOL). Do you remember any companies?
I know XsunX is in the business, but really in the beginning.
FRO Read this:
15/11-2007 10:27:00: (FRO) FRO - Q3 2007 Presentation
Please find enclosed the presentation of the Third Quarter 2007
Results, held in the morning Thursday November 15 2007, in the link
below.
Oslo, November 15, 2007
Ekstern link: http://hugin.info/182/R/1168701/229805.pdf
GDOCF Read this:
14/11-2007 15:36:00: (GOGL) GOGL - Q3 2007 Presentation
Please find enclosed the presentation of the
Preliminary Third Quarter 2007 Results, held in
the morning on Wednesday November 14, 2007.
Oslo November 14, 2007
Ekstern link: http://hugin.info/135378/R/1168473/229645.pdf
Wildbill. If you look at the FRO's numbers you see that they have lots of cash - no problem to pay good dividends to the shareholders. Big John has a myriad of ways to earn money - one of those is to lend his own shares to shortsellers, who then pay the Frontline dividends to JF (Frontline does not pay his dividends), and that's a lot of money. In addition JF gets the lending interest rate and the normal compensation for his shares.
And guess who is buying the cheap shares from the shortsellers? JF's various trusts and fonds of course.
When JF asks his own shares back, then after the shortsellers have pushed the price up - guess who is again lending expensive shares to always eager shortsellers..
No wonder I have noted that shorting Frontline's shares is no more as frantic as it once used to be.
I think you did the right thing. Carnegie in Oslo was very positive and already informed that they are going to upgrade the earnings of 2008 and 2009. They also estimated that FRO will sell one of its subsidiaries - Independent Tankers Corporation (ITC), which owns 6 VLCC (4 of them in long term T/C to BP) and 3 Suezmaxer - and distribute the money to FRO shareholders - OR list ITC on bourse, and distribute the shares to FRO shareholders. That way I have got a lot of GDOCF's and SFL's shares :)
FRO is climbing in Oslo NOK 213.00 = USD 40.10 after morning's dive.
DRYS will arrange a special shareholder meeting, but they did not inform the date. It can be just a formality, in other words a split is apparently going to happen. They may know that the majority of the shareholders (the big ones) already support it.
DryShips Plans 3-For-1 Stock Split
Monday November 12, 10:44 am ET
DryShips to Hold Shareholder Meeting to Approve a 3-For-1 Stock Split
NEW YORK (AP) -- Drybulk shipper DryShips Inc. said Monday it will hold a special shareholder meeting to approve an amendment that would allow for a 3-for-1 stock split.
The stock split, if approved, would be in the form of a dividend. The company had just under 35.5 million shares of stock outstanding as of Sept. 30.
FRO $38.74 INTERIM REPORT JULY - SEPTEMBER 2007
Thu Nov 15 07:56:14 CET 2007
Highlights - Frontline reports net income of $24.2 million and earnings per share of $0.32 for the third quarter of 2007. - Frontline reports nine month net income of $372.0 million and earning per share of $4.97. - Frontline reports a total gain on sale of assets of $4.8 million. - Frontline announces a cash dividend of $1.50 per share for the third quarter of 2007.
Third Quarter and Nine Months Results 2007
The Board of Frontline Ltd. (the `Company` or `Frontline`) announces net income of $24.2 million for the third quarter of 2007, equivalent to earnings per share of $0.32. Operating income for the quarter was $66.9 million compared to $190.9 million in the second quarter. The second quarter included a gain on sale of assets of $66.1 million compared to $4.8 million in the current quarter primarily relating to the sale of Front Horizon.
The reported earnings reflect a substantially weaker spot market. The average daily time charter equivalents (`TCEs`) earned in the spot and period market by the Company`s VLCCs, Suezmax tankers and Suezmax OBO carriers were $36,000, $25,000 and $41,300, respectively compared with $51,500, $38,600 and $38,300 respectively in the second quarter. The results show a continued differential in earnings between single and double hull tonnage. The spot earnings for the Company`s double hull VLCC and Suezmax vessels were $36,100 and $28,300, in the third quarter, compared to $57,700 and $50,500, in the second quarter. Brokerage commissions related to six VLCC vessels on time charter, which were previously reported under ship operating costs, have been reclassified to voyage expenses this quarter and prior period comparatives have been restated to conform to current period presentation.
Profit share expense of $5.5 million has been recorded in the third quarter as a result of the profit sharing agreement with Ship Finance International Limited (`Ship Finance`) compared to $15.7 million in the second quarter.
Charterhire expenses have increased by $5.4 million in the third quarter compared to the second quarter, primarily as a consequence of chartering in two additional vessels in the quarter.
Interest income was $12.6 million in the third quarter, of which $7.3 million relates to restricted deposits held by subsidiaries reported in Independent Tankers Corporation (`ITC`). Interest expense, net of capitalized interest, was $57.5 million in the third quarter of which $13.7 million relates to ITC and $45.9 million relates to the capital lease interest expense in Frontline.
Frontline announces net income of $372.0 million for the nine months ended September 30, 2007, equivalent to earnings per share of $4.97. The average TCEs earned in the spot and period market by the Company`s VLCCs, Suezmax tankers, and Suezmax OBO carriers for the nine months period ended September 30, 2007 were $45,800, $33,000 and $38,800, respectively.
As of September 30, 2007, the Company had total cash and cash equivalents of $937.4 million which includes $628.3 million of restricted cash. Restricted cash includes $394.5 million relating to deposits in ITC and $232.0 million in Frontline Shipping Limited and Frontline Shipping II Limited which are restricted under the charter agreements with Ship Finance.
The 2006 financial statements have been restated to reflect the revised accounting treatment for three entities within the ITC group which were previously fully consolidated but are now being accounted for as investments under the equity method. The restatement has no effect on net income.
As of November 2007, the Company has average total cash cost breakeven rates on a TCE basis for VLCCs and Suezmaxes of approximately $30,000 and $22,100, respectively.
Fleet development
In October 2007, Frontline agreed with Ship Finance to terminate the long term charter party between the companies for the single hull VLCC Front Duchess and Ship Finance simultaneously sold the vessel for net sales proceeds of $54.5 million. Ship Finance will make a compensation payment to Frontline of approximately $25.4 million for the early termination of the current charter party, which will be recognized in the first quarter of 2008.
Other Matters
In October 2007, Frontline announced the sale of its entire holding of 34,976,500 shares in Dockwise Ltd. (`Dockwise`). The shares were sold at a gross price of NOK 25 per share, with net proceeds of approximately $157 million. Frontline is expected to record a gain of approximately $49 million in the fourth quarter of 2007 as a result of this sale. Simultaneously with the sale of the shares Frontline declared an interim extraordinary dividend of $1.75 per share which was paid on October 24, 2007. In the second quarter of 2007, Frontline recorded a gain on the issuance of shares by Dockwise of $43.7 million.
In November 2007, Frontline announced that it has entered into an agreement to sell its entire holding of 1,714,544 shares in IMAREX ASA to NYMEX Holdings, Inc. The sale price was NOK 160 per share, with proceeds of approximately $51 million. Frontline is expected to record a gain of approximately $43 million in the fourth quarter of 2007 as a result of this sale.
On November 15, 2007, the Board declared a dividend of $1.50 per share. The record date for the dividend is November 28, 2007, ex dividend date is November 26, 2007 and the dividend will be paid on or about December 12, 2007.
74,825,169 ordinary shares were outstanding on September 30, 2007, and the weighted average number of shares outstanding for the quarter was also 74,825,169.
The full report is available in the link below.
November 14, 2007
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to: Bjørn Sjaastad: Chief Executive Officer, Frontline Management AS +47 23 11 40 99
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 76
http://hugin.info/182/R/1168615/229754.pdf