Nice writeup. I've followed the company for a while now and increased my position after the equity raise. Although painful, the raise was necessary and in my eyes decreased a lot of uncertainty going forward. A great deal for Fredriksson, getting more shares at 7.00 NOK before the rigs move to longer term contracts as West Africa transitions from exploration to production over the next couple of years.
The highlight here for me and that you pointed out, is that the Mira and Bollsta were bought for $400M a piece in a cut-throat environment, and the rigs were not even fully completed! NOL at a $650M EV today is a steal.
Thanks Matt. I think you’re looking at this the right way and interesting framing re Fredriksen snagging this right before the inflection. (He’s been adding to VAL as well- safe to say he’s not a bad guy to clown in offshore). Have a decent position in Sintana and have been following Namibia closely…hard to think NOL doesn’t get something decent done sooner than later.
what do you think about shares of Eco Atlantic Oil & Gas? it look that their price implies much less of positives, if any, than in case of Sintana's shares....
I used to track Eco Atlantic Oil & Gas for some time, due to interests held in some of the most promissing locations on the Earth. I stopped due to several dillutions (as from share issuance as from fam outs). But I assume, that other explorers can't be much different, given that they don't generate cash flow and drilling and other exploration is rather capital intensive
I thought the story sounded familiar. It was also written up on VIC sometime ago. It's definitely interesting.
One thing that confuses me is why their margins were so low over the past year? Looking at their revenue I would think they had good day rates / utilization yet they operated at a loss? I guess I'm missing something?
You need to adjust for deferred costs and reimbursable costs to get cash margins at the unit level. If you go to Q2 financials, you will see (at Note 4) a break down of operating expenses, of which daily operating expense was $79m for first half of 2024. But that # includes reimbursable expenses of ~$10m - backing that out gets us pretty close to ~$130m annual expense across the fleet. The 180K daily rig expense I use is industry standard for HE semis, see e.g. older Transocean decks.
Nice writeup. I've followed the company for a while now and increased my position after the equity raise. Although painful, the raise was necessary and in my eyes decreased a lot of uncertainty going forward. A great deal for Fredriksson, getting more shares at 7.00 NOK before the rigs move to longer term contracts as West Africa transitions from exploration to production over the next couple of years.
The highlight here for me and that you pointed out, is that the Mira and Bollsta were bought for $400M a piece in a cut-throat environment, and the rigs were not even fully completed! NOL at a $650M EV today is a steal.
Thanks Matt. I think you’re looking at this the right way and interesting framing re Fredriksen snagging this right before the inflection. (He’s been adding to VAL as well- safe to say he’s not a bad guy to clown in offshore). Have a decent position in Sintana and have been following Namibia closely…hard to think NOL doesn’t get something decent done sooner than later.
what do you think about shares of Eco Atlantic Oil & Gas? it look that their price implies much less of positives, if any, than in case of Sintana's shares....
I used to track Eco Atlantic Oil & Gas for some time, due to interests held in some of the most promissing locations on the Earth. I stopped due to several dillutions (as from share issuance as from fam outs). But I assume, that other explorers can't be much different, given that they don't generate cash flow and drilling and other exploration is rather capital intensive
I don’t have an opinion on Eco. I do own a bit of Sintana.
I thought the story sounded familiar. It was also written up on VIC sometime ago. It's definitely interesting.
One thing that confuses me is why their margins were so low over the past year? Looking at their revenue I would think they had good day rates / utilization yet they operated at a loss? I guess I'm missing something?
You need to adjust for deferred costs and reimbursable costs to get cash margins at the unit level. If you go to Q2 financials, you will see (at Note 4) a break down of operating expenses, of which daily operating expense was $79m for first half of 2024. But that # includes reimbursable expenses of ~$10m - backing that out gets us pretty close to ~$130m annual expense across the fleet. The 180K daily rig expense I use is industry standard for HE semis, see e.g. older Transocean decks.
The entire sector is promising! I’ll check also your article thanks for sharing
Same sector of our last article! :)
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