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RIG
Aug 22, 2020 14:02:18 GMT -5
Post by Deleted on Aug 22, 2020 14:02:18 GMT -5
Looking Into Transocean's Return On Capital Employed,Benzinga•August 20, 2020 finance.yahoo.com/news/looking-transoceans-return-capital-employed-173337857.htmlDuring Q2, Transocean's (NYSE: RIG) reported reported earnings showed a $198.00 million loss. What Is ROCE? Return on Capital Employed is a measure of yearly pre-tax profit relative to capital employed in a business. Changes in earnings and sales indicate shifts in a company's ROCE. A higher ROCE is generally representative of successful growth in a company and is a sign of higher earnings per share for shareholders in the future. A low or negative ROCE suggests the opposite. In Q2, Transocean posted an ROCE of -0.02%. Keep in mind, while ROCE is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future. ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Transocean is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will lead to higher returns and earnings per share growth. For Transocean, the return on capital employed ratio shows the current amount of assets may not actually be helping the company achieve higher returns, a note many investors will take into account when making long-term financial decisions. Q2 Earnings Recap Transocean reported Q2 earnings per share at $0.0/share, which beat analyst predictions of $-0.27/share.
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RIG
Aug 23, 2020 13:33:26 GMT -5
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Post by Blitz on Aug 23, 2020 13:33:26 GMT -5
www.fool.com/investing/2020/08/21/transocean-stock-crashes-28-on-bankruptcy-concerns/Excerpt: As things stand today, Transocean likely has the best prospects of any of the handful of publicly traded offshore drillers to ride out the downturn without going through a shareholder-destroying bankruptcy reorganization. But that's not the same thing as saying it's a company worth buying right now. Being less likely than weaker peers is not the same thing as being unlikely. To the contrary, I think the odds are not in Transocean's favor to survive as a going interest without a restructuring that would likely further wipe out shareholders.
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Post by bjspokanimal on Aug 25, 2020 17:25:22 GMT -5
Some musings...
Moody's had Transocean on "negative watch" for some time before Transocean started it's initiative to tender it's near-dated bonds. The tendering compelled Moody's to act on it's negative outlook and downgrade RIGs bonds as the extending of maturities is generally viewed by rating agencies as a defensive move designed to stave off BK.
Transocean's second wave of PPS downdraft was inspired by the declaration of BK by Valaris, a UK contract driller that was only a year removed from a merger between Ensco and Rowan to create the company. Valaris is described as the world's biggest driller, with 74 total rigs, but 50 of those rigs are shallow-water jackup rigs and 8 of them are semi-submersible rigs that are less capable than high-spec drill ships. Valaris has just 16 drill ships. Thus, Valaris had serious problems with idle rigs.
Transocean, on the other hand, greatly reorganized itself in 2015/2016 and sold off or scrapped it's jackups and almost all of it's semis, leaving it with a fleet comprised almost entirely of Drillships, and a much more modern, overall fleet. Still, RIG has ships that are or will be cold-stacked and at least one that I know of that they're scrapping right now. Transocean is also significantly healthier than Valaris and considered the healthiest of the big-9 drillers, albiet relatively unhealthy compared to the average company of any industry. Transocean has ~$1.3 billion cash and a $1.5 billion credit line and a best-in-class drilling backlog, but like other drillers, struggles to secure new backlog and, unlike other drillers, has 2 new-build contracts that are very difficult to stagger or re-negotiate.
I would remind folks that Transocean also dropped significantly, from around $1.30/share to less than 80 cents per share when Diamond Offshore went BK a few months ago, so we've seen this scenario once already. But with each competitor's trip to BK court, it makes investors increasingly skittish about RIG, and increasingly important to view those competitors' situations with Transocean's business fundamentals.
Yesterday's PPS rebound reflected Transocean's success in tendering it's bonds. I believe it's approaching a fully-subscribed status which is quite a contrast to Seadrill's tender which has been largly unsuccessful and likely will result in BK. Recall that Seadrill is very unhealthy and already went through BK last year before covid ever started.
Transocean's bond tender is to replace bonds that mature in 2021 and 2022 with new bonds that mature in 2027... hopefully after the next oil up-cycle has long begun. Transocean does have other bonds maturing in 2023 and 2024, however, so there's a big risk of BK if anything holds oil prices low for another year or so. The new, 2027 bonds also have higher coupons, so there's an expense to extending maturities at times like these.
Success investing in Transocean rests on current widespread depletion with scant exploration combining with hydrocarbon demand increases that get the planet back to within 90% of what demand was before covid hit. Those things are happening now, but more slowly than we all hope they will as other companies fail. Drilling rigs in the US are drilling at barely 18% the pace they were last winter and global drilling, albeit better, is at barely 15% of what it was before the beginning of the glut back in 2015.
I was asked recently about what happens when these companies go through BK but continue operating. It's important to remember that that usually results in pre-BK shareholders ending up with shares that are worth very little, if anything. That's because BK usually results in converting bonds to equity that dilutes prior equity down to practically nothing, so it's important to understand that risk element. In Valaris's case, current equity shares are expected to be wiped out but those shareholders may receive to well out-of-the-money warrants that would only realize value if the company recovers substantially following BK.
Finally, I noticed today that this week is shaping up to be another sizable oil inventory draw in the U.S. and a sizable gasoline draw as well, as summer driving season approaches an end. WTI crude rose to over $43/barrel on the news and news of temporary production shut-ins caused by the gulf hurricane. So again, oil industry fundamentals are moving in the right direction. But higher oil prices are one thing, whereas higher capital spending by oil companies is another. It taxes the nerves of a contrarian playing this stock, for sure.
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RIG
Aug 28, 2020 13:33:49 GMT -5
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Post by birdnest on Aug 28, 2020 13:33:49 GMT -5
Anyone else been buying RIG over the pass couple days? I bought more this morning. I bought everything I sold at $2.25ish. Seems like it’s leveled out since the drop 3 day drop. I’ll wait and see... good luck all
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Post by Blitz on Aug 28, 2020 13:52:17 GMT -5
I bot more.
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RIG
Aug 28, 2020 16:55:10 GMT -5
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Post by bjspokanimal on Aug 28, 2020 16:55:10 GMT -5
You know, Transocean points up one relevant issue... taxation on capital gains.
It's always presented as a "fairness" issue. Stock investors are wealthy and undeserving, in the eyes of those who elect politicians who raise capital gains taxes in order to re-distribute the proceeds to others.
But what isn't ever discussed, is the assumption of "risk". Stock investors in general, and Transocean investors in particular, understand that making a buck with an investment can entail a tremendous amount of risk... risk that people who receive the proceeds from capital gains taxes without assuming any risk at all, never appreciate, know about, and/or even understand.
If a stock like Transocean WERE to go BK, there's nobody out there who's going to give us back any capital gains tax money to help alleviate the pain... only a loss-carryover... which folks like Kamala Harris and Bernie Sanders have already stated they would like to curtail, just as they oppose the indexing of capital gains to avoid situations where capital gains taxes can reach or even exceed 100%, in real, inflation-adjusted terms.
I guess that explains why so many investors have moved to places like Singapore and Ireland where financial risk-taking is appreciated in the tax code, and growth and prosperity is optimized as a result.
Bottom line: countries succeed when risk takers are appreciated and not unreasonably punished for the risks they take. Devote too many resources to those who take no risks and are otherwise un-productive, and eventually, those will be the only people who live in your country.
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RIG
Aug 29, 2020 8:44:05 GMT -5
Post by Blitz on Aug 29, 2020 8:44:05 GMT -5
You know, Transocean points up one relevant issue... taxation on capital gains. It's always presented as a "fairness" issue. Stock investors are wealthy and undeserving, in the eyes of those who elect politicians who raise capital gains taxes in order to re-distribute the proceeds to others. But what isn't ever discussed, is the assumption of "risk". Stock investors in general, and Transocean investors in particular, understand that making a buck with an investment can entail a tremendous amount of risk... risk that people who receive the proceeds from capital gains taxes without assuming any risk at all, never appreciate, know about, and/or even understand. If a stock like Transocean WERE to go BK, there's nobody out there who's going to give us back any capital gains tax money to help alleviate the pain... only a loss-carryover... which folks like Kamala Harris and Bernie Sanders have already stated they would like to curtail, just as they oppose the indexing of capital gains to avoid situations where capital gains taxes can reach or even exceed 100%, in real, inflation-adjusted terms. I guess that explains why so many investors have moved to places like Singapore and Ireland where financial risk-taking is appreciated in the tax code, and growth and prosperity is optimized as a result. Bottom line: countries succeed when risk takers are appreciated and not unreasonably punished for the risks they take. Devote too many resources to those who take no risks and are otherwise un-productive, and eventually, those will be the only people who live in your country. Spok, I have often tried to explain the aspects of 'risk' when it comes to investing in stocks. A lot of people simply just don't get it. They just see it as a pure profit or loss. Most think of only the profit part too... and they think of that as 'free' money made from the sweat off of labors' backs. It's seen as a black and white issue with no gray. Almost all the people that don't get it have rarely or never purchased a stock. They have never really invested in the stock market outside of some 401K plan from their employer. And for many U.S. citizens that is the case. Perhaps even most U.S. citizens. So, that means the liberal Left can appeal to their base, based on ignorance. I have also tried to explain that it is the issuance of corporate stock that fuels entrepreneurial innovation through venture capital and angle investors... not your local banker issuing loans. The huge risks taken by investors associated with venture capital investment is what fuels America's technological gains and our economy. They make and keep America on top. I continue to explain that those huge risks generate huge losses too as most venture investments fail, with only a few big winners. People who have never invested only hear the 'big winners' part. They associate big winners with wealth and wealth should be taxed at a progressive tax rate. These same people also don't understand corporate dividends paid to individuals that own that corporation are a double taxation on the same money. All that said just to say something you and Pelosi and Kamala and Bernie already know... Joe may not know, however... but his son Hunter does for sure!
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RIG
Sept 1, 2020 17:27:08 GMT -5
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Post by bjspokanimal on Sept 1, 2020 17:27:08 GMT -5
@ blitz; There is also the proposal to tax capital gains and dividends at up to a rate of 39.6%. No other industrialized country on earth comes even close to doing that. What globe-trotting financier would invest in the U.S. with such draconian, confiscatory tax policies?... the same financier that wouldn't touch an investment in Venezuela with a ten meter cattle prod, that's who.
There is also the proposal to levy a minimum tax on a company any time they make a profit. That will also destroy the incentive by many to take the risk of starting a company when they know that losses in the first few years can't be carried over and applied against gains in subsequent years to help them grow out of their early, and usually most vulnerable, years. That's especially true with fledgling oil companies that have high, upfront costs and the losses they incur. They expect to recoup those losses with gains in subsequent years when the oil starts flowing but with the Biden proposal, those companies will be hit with taxes that could make or break them when they finally get into the black, given that they'd likely have drilling- related debt to deal with and the need to apply net profits to cap-ex to continue growing.
While tax issues are relevant to RIG... particularly given it's particular traits, this is still a subject I'm done with on this thread.
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RIG
Sept 1, 2020 17:32:26 GMT -5
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Post by bjspokanimal on Sept 1, 2020 17:32:26 GMT -5
Big inventory draws reported by API today for both crude oil and gasoline. A lot of this was hurricane disruptions but draws were expected even absent the hurricane. There was a distillate draw as well.
We are now exporting oil to china per the trade deal, so that's helping with inventories. A lot of gulf platforms and refineries are still down this week from the hurricane so we'll likely see another round of big draws next week that reflects the last week of summer driving season (but not driving related to the 3 day weekend.
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RIG
Sept 2, 2020 22:09:18 GMT -5
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Post by Blitz on Sept 2, 2020 22:09:18 GMT -5
I watched the ABC national evening news tonight just because I read they are the #1 rated news show...
Their report stressed that there could be a vaccine around Nov 1. Then they said Trump might be going too fast, cutting corners, and putting people at risk with an unsafe vaccine for political purposes.
My thought related to that and RIG is... if there is a vaccine in the Fall perhaps it will get people flying again requiring burning jet fuel by the plane loads... meaning at rates that will draw down inventories in big numbers.
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RIG
Sept 8, 2020 15:37:53 GMT -5
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Post by birdnest on Sept 8, 2020 15:37:53 GMT -5
I think I hate this stock more then the casino stocks.... My timing is horrible
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RIG
Sept 8, 2020 17:44:45 GMT -5
Post by Blitz on Sept 8, 2020 17:44:45 GMT -5
I expected a decline today due to the overall market and news hitting the streets that the summer driving and flying season is over.
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Post by bjspokanimal on Sept 9, 2020 12:14:03 GMT -5
Hard to pinpoint the exact balance of reasons for the swoon, but given that the end of Summer driving season was a known and anticipated event, I'd say that it's impact was less than 10% of the reason. Other items were less anticipated. The surge in covid cases, and related restrictions, in Europe and India would be a bigger factor, IMO. Saudi Arabia also reduced it's asking price for shipments to Asia. Further, OPEC has also ticked up production and Russia is rattling the sabers for more production, including that they're providing government aid for oil services to it's producers. I think there was also hope that airlines would fare a little better once they put in the stringent passenger protection provisions that they're practicing now. The Motley Fool article yesterday that suggested an uptick in drilling was greatly overblown. There are a few more active rigs, but it's tiny by comparison to the year-ago drilling volumes and reflects oil having risen into the $40s... which is now not the case. Depletion is everywhere, but still not sufficient to bring production down to demand levels prior to the advent of a Covid Vaccine. China is the bright spot, with consumption surging. Keep an eye on the API (today) and EIA (tomorrow) reports. Even absent the hurricane's impact, production is still bottomed out as additional wells brought online are being offset by rapid decline in shale wells overall and very little drilling. The 2 charts near the top of this article paint an interesting picture about gasoline demand vs drilling. It goes far to highlight the impact of Kerosene (eg: jet fuel) and distillates, which are still lagging but getting slightly more demand weekly in the U.S. (albeit not so much in Europe). oilprice.com/Energy/Energy-General/Oil-Prices-Crash-On-Weak-Demand.html
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Post by Blitz on Sept 18, 2020 11:39:14 GMT -5
It appears Covid is reigniting across Europe right now as the and winter rapidly approaches. If Covid catches fire again, RIG may be in for an even bigger struggle to stay afloat... Transocean's stock drops after long-time bull downgrades, slashes price target Published: Sept. 16, 2020 at 9:12 a.m. ET By Tomi Kilgore RIG -4.95% OIH -0.95% SPX -0.96% Shares of Transocean Ltd. RIG, -4.95% dropped 1.9% in premarket trading Wednesday, after a long-time bull downgraded the oil services company, saying the company is "not immune" as the offshore industry's challenges are likely to persist. Analyst Charles Minervino cut his rating to neutral, after being at positive since July 2018, while slashing his price target to $1.15 from $2.50. "The offshore drilling industry is suffering from weak demand and substantial excess capacity, and while [Transocean] is among the better positioned companies, it is not immune to the downturn," Minervino wrote in a note to clients. He noted that several offshore drillers have already filed for bankruptcy. Transocean's stock closed below $1 as recently as Friday, and closed at a record low of 84 cents on April 27. It has plunged 84.5% year to date through Tuesday, while the VanEck Vectors Oil Services ETF OIH, -0.95% has tumbled 57.4% and the S&P 500 SPX, -0.96% has gained 5.3%. ///////////////////////////// India's COVID-19 total tops 5 million as cases rise in Europe Lisa Schnirring | News Editor | CIDRAP News | Sep 16, 2020 www.cidrap.umn.edu/news-perspective/2020/09/indias-covid-19-total-tops-5-million-cases-rise-europeIn international COVID-19 developments, India became the second country, behind the United States, to pass 5 million cases, and European health officials warned that rising cases as schools and indoor activities ramp up are a reminder that the pandemic isn't over. The global total today climbed to 29,664,114, and 937,111 people have died from their infections, according to the Johns Hopkins online dashboard. India surge stretches oxygen supplies India's surge continues to accelerate, and today it reported 93,824 new cases, continuing its recent trend of reporting more daily cases than anywhere in the world. The new cases put the country over the 5 million mark, and it took only 12 days for the country to move from 4 million to 5 million cases. The surge in hospitalizations in some of India's hardest-hit states, which include Maharashtra, Gujarat, and Uttar Pradesh, has tripled the demand for oxygen, for which supplies are stretched thin, Reuters reported. Meanwhile, researchers from India's Council of Scientific and Industrial Research reported the country's first two confirmed COVID-19 reinfections, both involving health workers at a hospital in Noida in Uttar Pradesh state, the Deccan Herald, an English language newspaper based in Karnataka state, reported. Both were diagnosed as having asymptomatic infections during hospital screening during the first part of May. One tested positive on Aug 25, and the other tested positive again on Sep 5, both with higher viral loads. Researchers based their reinfection assessments on genetic sequencing tests. Rise in European cases Over half of European Union countries are reporting COVID-19 case rises, and the 14-day case notification rate for the region, including the United Kingdom, has been increasing for more than 50 days, the European Centre for Disease Prevention and Control (ECDC) said today. Part of the rise may be due to increased testing that countries are doing to get a better handle on the virus, but relaxed distancing measures is also a contributing factor, it said. The rising cases amid school reopening and a transition to more indoor activities is a reminder that the pandemic isn't over. The ECDC said recent evidence affirms the benefits of physical distancing, and it urged countries to maximize testing, which should be combined with contact tracing and isolation and the treatment of sick people. It also said with the flu season approaching, health systems should have surge capacity plans in place for treating patients who have respiratory illnesses. In related developments, Romania today reported another daily record, adding 1,713 cases to its total, Reuters reported. The country's main hot spots are the cities of Bucharest and Brasov, and Arges and Prahova counties. Rising cases come as schools reopened on Sep 14 and a few weeks ahead of national voting to elect city mayors. Elsewhere, the Madrid region of Spain is set to announce tightened COVID-19 measures to begin on Sep 18, according to Reuters. Spain is among the European countries reporting steep rises, with about one third of its cases coming from the Madrid area. Today the country reported 11,193 new cases. More cases elsewhere Other global COVID-19 headlines today include: Myanmar reported a record daily high of 307 new cases today and is rushing to build a field hospital in the commercial capital city of Yangon, the main hot spot, to handle a surge of illnesses that threatens to overrun the country's health system. An Iranian health official said yesterday that amid a new rise in cases the country may be facing a third wave of COVID-19 activity. Cases are rising faster in Tehran than the rest of the country, and health official say travel and people not taking precautions are fueling the latest activity, which comes as other Middle East countries are reporting similar rises. COVID-19 totals in the Americas passed 15 million cases and 500,000 deaths in the past week, Pan American Health Organization Director Carissa Etienne, MBBS, MSc, said today at a media briefing. An overall decline in the United States overshadows worrisome rises in some parts of the country, and cases in Colombia near the Ecuador border have risen tenfold over the past 2 weeks. Also, some of the larger islands in the Caribbean such as Jamaica are experiencing drastic rises in cases. The world might not be able to start thinking of returning to normal until 2022, Soumya Swaminathan, MD, chief scientist for the World Health Organization said today at a United Nations Foundation briefing. She said it will take at least until 2022 for enough vaccinated people to build immunity to the virus.
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Post by bjspokanimal on Sept 18, 2020 14:18:04 GMT -5
Here is where I keep my finger on the pulse of U.S. oil inventories, production, and demand: www.eia.gov/petroleum/weekly/index.phpOn this site, note the "tabs" for crude, gasoline, distillates and propane on the top left of the page. These tabs give you 90% of what you need. For crude, note that inventories are steadily declining. A lot of that is the OPEC curtailments, but when you look down at the graph of domestic production, you can easily surmise that that is most of the reason for the decline. For gasoline, note that gasoline inventories have declined back into the normal, 5-year average range. Demand for gasoline is still not "quite" back to normal, but it's balanced nicely with refinery utilization now. Distillates (mostly diesel, but includes fuel oil) are the problem, which is why on road diesel prices are so low these days. Looking at diesel demand, one can see a good part of the reason as distillate demand is stuck below the year ago levels. But another reason for the diesel glut is the depression with the airlines these days. Refineries must always produce heavier products in order to produce gasoline and usually that's pretty well balanced but nowadays, it's not. That's especially true of kerosene (eg: Jet Fuel), for which demand is less than half what it usually is. Because distillates are much closer in density with kerosene than gasoline is, too much distillate production results from less kerosene production while they're busy trying to eek as much gasoline out of a barrel of crude as they can. Internationally, inventory stocks are declining as well. I've especially noted the reduction in the amount of "floating" crude in large tankers as it's become increasingly un-economical to pay for that storage, even though there is still a fair amount of "backwardation" in oil futures right now. Most importantly, nobody's drilling and OPEC is still talking cuts and compliance. Production is going in the right direction (down) and consumption is rising, albeit in fits and starts with some recent leveling off. There will be a "cycle", but it's agonizingly slow as 170 vaccine developments race into and through phase-3 testing.
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RIG
Sept 18, 2020 16:53:53 GMT -5
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Post by Blitz on Sept 18, 2020 16:53:53 GMT -5
I would guess all these storms in the Gulf mean a lot of rigs will remain idle lowering inventories even more.
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RIG
Sept 18, 2020 17:44:17 GMT -5
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Post by birdnest on Sept 18, 2020 17:44:17 GMT -5
Good information above S and Blitz. It’s amazing how it was around $3 less then 2 months ago.
I think it’s just going down because I have a boat load of shares....
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RIG
Sept 25, 2020 11:22:17 GMT -5
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Post by Blitz on Sept 25, 2020 11:22:17 GMT -5
It looks like it’s on life support... 😏 seekingalpha.com/article/4376306-transocean-pain-ahead-backlog-is-decreasing-fast-paceTransocean: More Pain Ahead As Backlog Is Decreasing At A Fast Pace Sep. 25, 2020 9:20 AMTransocean Ltd. (RIG) Summary Transocean has plunged 55% since June but there is more pain ahead. The company has an excessive debt load. The offshore drilling business has remained depressed for six consecutive years, with no light on the horizon. The downturn in the offshore drilling business is different from the downturns in other businesses. In June, I wrote an article in which I analyzed why Transocean (RIG) is likely to follow the fate of its peers Seadrill, Diamond Offshore, Noble Corporation and Valaris and restructure. Since then, the stock has plunged 55%. I have written many other bearish articles on this stock over the last three years, in which the stock has shed 90%. After such a prolonged downtrend, some investors may think that the stock has finally become a bargain. However, in this article, I will analyze why the stock is still excessively risky. First of all, Transocean has repeatedly emphasized some positive factors in its business in the last several presentations it has provided to its shareholders. It has reduced the average age of its floaters from 21 years in 2014 to 9 years while it has increased the percent of its harsh environment and ultra-deepwater floaters from 45% in 2014 to 100% now. This is indeed a great improvement in the asset portfolio of the company, which is doing its best to improve the factors it can control. Transocean also boasts of having a backlog of $8.9 billion, which is four times the backlog of the nearest competitor. However, investors should note that the company has been consuming its backlog at a fast pace due to the prolonged downturn in its business. Since June-2019, the backlog has plunged 26%, from $12.1 billion to $8.9 billion (in July-2020). Due to the fast consumption of its backlog, Transocean will not be able to continue to support its results in this way for much longer. To provide a perspective, Transocean has used $3.2 billion of backlog in the last 13 months whereas it has only $2.1 billion of backlog for 2021 and $1.6 billion of backlog for 2022. Despite the extensive use of its backlog, Transocean has posted excessive losses in each of the last four years. During the last three years and the first half of this year, the offshore driller has posted aggregate losses of $7.3 billion. This amount is 11 times the current market cap of the stock and hence it is undoubtedly gigantic. As the results in recent years have been supported by the use of the backlog, investors should worry about the effect of a decreasing backlog on the results in the upcoming years. The depression of offshore drillers The immense losses of Transocean have resulted from the prolonged downturn of the offshore drilling business. This business offered outsized profits during 2012-2014, when oil was trading around $100 per barrel. However, in mid-2014, the price of oil began to collapse due to the boom in the U.S. shale oil production. Even worse, there was an excessive supply of floaters and jack-ups due to the huge investments of offshore drillers in new capacity during the boom period. While the price of oil bottomed in early 2016 and the rest of the energy market began to recover, the offshore drilling business remained depressed due to the supply glut of floaters and jack-ups. Even worse, the coronavirus crisis has now caused a severe global recession and thus it has caused a collapse in the demand for oil products and hence in the global oil production.
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RIG
Sept 25, 2020 20:08:50 GMT -5
Post by Deleted on Sept 25, 2020 20:08:50 GMT -5
I had HTZ and CHK both in bankrupcy (bk) mode, HTZ already declared BK, I bought at $3 and sold at $1.
After HTZ hit $1 in bankruptcy it went up to $5 at one time.
So if RIG goes BK, not saying it will, there's a chance the traders may move it higher.
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RIG
Sept 25, 2020 21:54:39 GMT -5
Post by Blitz on Sept 25, 2020 21:54:39 GMT -5
I had HTZ and CHK both in bankrupcy (bk) mode, HTZ already declared BK, I bought at $3 and sold at $1. After HTZ hit $1 in bankruptcy it went up to $5 at one time. So if RIG goes BK, not saying it will, there's a chance the traders may move it higher. What??? You’re saying maybe the Robbinhood neophytes might save Rig after a bk? Can I have some of whatever your smoking! 😎
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RIG
Sept 26, 2020 8:16:30 GMT -5
Post by Deleted on Sept 26, 2020 8:16:30 GMT -5
Understanding Transocean's Unusual Options Activity : Benzinga•September 24, 2020 finance.yahoo.com/news/understanding-transoceans-unusual-options-activity-135041267.htmlOn Thursday, shares of Transocean (NYSE: RIG) saw unusual options activity. After the option alert, the stock price moved down to $0.88. Sentiment: BEARISH Option Type: SWEEP Trade Type: CALL Expiration Date: 2020-11-20 Strike Price: $0.50 Volume: 999 Open Interest: 770 Three Signs Of Unusual Options Activity - ADVERTISEMENT - Extraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. The number of contracts that have been traded, but not yet closed by either counterparty, is called open interest. A contract cannot be considered closed until there exists both a buyer and seller for it. Another sign of unusual activity is the trading of a contract with an expiration date in the distant future. Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset. Contracts with a strike price far from the underlying price are also considered unusual because they are defined as being “out of the money”. This occurs when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made because the underlying asset value is expected to change dramatically in the future, and the buyer or seller can take advantage of a greater profit margin. Understanding Sentiment Options are “bullish” when a call is purchased at/near ask price or a put is sold at/near bid price. Options are “bearish” when a call is sold at/near bid price or a put is bought at/near ask price. Although the activity is suggestive of these strategies, these observations are made without knowing the investor’s true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they’re hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. Trading Options With These Strategies Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account
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RIG
Sept 26, 2020 8:36:03 GMT -5
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Post by Blitz on Sept 26, 2020 8:36:03 GMT -5
Yep, this is getting very painful.
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RIG
Sept 26, 2020 11:11:40 GMT -5
Post by redbullnvodka on Sept 26, 2020 11:11:40 GMT -5
Painful is correct....hope it doesn’t go to $0.50
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RIG
Sept 30, 2020 19:00:42 GMT -5
Post by bjspokanimal on Sept 30, 2020 19:00:42 GMT -5
A comment from the seeking alpha piece that blitz provided above.
I noticed that the author focused on "earnings" rather than "EBITDA", which is a proxy for cash flow.
When evaluating financially challenged companies, particularly companies that are very asset-intensive like Transocean, EBITDA becomes a much more relevant metric to use when evaluating a company's survivability. That's why when lenders make loans to companies, they always have covenants, and those covenants almost always involve debt-to-EBITDA ratios, NOT debt-to-earnings ratios. LVS had them in 2009 and fought to avoid breaching the solvency thresholds of their debt-to-EBITDA ratios on their debt.
When evaluating RIG's earnings, you have to first remove extraordinary, non-cash items, which have lately involved asset write-downs, since the future earnings potential of those assets are diminished and, thus, the depreciation and amortization schedules for the assets are insufficient as a result. Excluding extraordinary items is always necessary to arrive at a company's quarter-to-quarter operating performance.
Secondly, removing non-cash expenses helps to understand how a company's cash flow is holding up. EBITDA removes depreciation, amortization, taxes, and interest expense from earnings. EBITDA is not a true expression of cash flow, since interest expense is a cash expense, so I generally subtract it from EBITDA to arrive at a better representation of cash flow.
Since taxes are based on income and RIG is unprofitable, their effect on EBITDA is negligible.
For Transocean, it looks like this:
Q1: EBITDA = +$235 million Interest = $168 million EBITDA less interest expense = +$67 million
Q2: EBITDA = $418 million Interest = $153 million EBITDA less interest expense = +265 million
Importantly, no company can live off of positive EBITDA-less-interest expense forever. Assets wear out and eventually become obsolete and uncompetitive. Depreciation and amortization take that into account, so over the long run, such non-cash expenses tell a story of corporate decline.
Also, Transocean is deploying cash flow to the construction of 2, new, best-in-class drillships, so that cash usage should be taken into account. Construction continues, and the contracts are pretty strict, but if RIG becomes increasingly challenged, I would expect them to negotiate a slowing or halt of construction prior to considering a chapter 11 reorganization.
But... as the seeking alpha guy correctly mentions, Transocean has the newest and most technologically advanced assets in the industry. The un-competitive nature of their "wearing out" is only relevant to the extent that they are wearing out "relative" to how fast their competition's like assets are ALSO wearing out, so there's little concern that RIG is becomming less competitive. I'm much more concerned about how competitive energy alternatives to oil and gas are than I am about Transocean competing with other drillers.
There are many takes out there on how RIG will persevere if oil prices remain low and drilling remains depressed. I watch inventories, production, and most importantly how well oil companies are restraining depletion with new discoveries... which they aren't.
I did see in the EIA report today that crude oil inventories dropped another 2 million barrels in the U.S. last week, and distillates dropped 3 million. Gasoline inventories increased by 700,000 barrels however, and propane inventories appear topped out ahead of the heating season.
Inventories, both global and U.S., are heading in the right direction and are falling, in general, almost every week. All eyes are on "demand" for the remainder of 2020, but even with current demand levels, inventories are declining due to curtailed production and depletion.
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RIG
Oct 5, 2020 16:03:06 GMT -5
via mobile
Post by Blitz on Oct 5, 2020 16:03:06 GMT -5
Tic toc... RIG is on the clock.
Q: How long can stock be under $1? A: 6 months.
The NYSE formally notifies the company and gives it six months to bring its stock price and average closing price up above $1. This means a stock can potentially trade for less than $1 on the NYSE for several months before either regaining compliance or being delisted.
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