Some thoughts from people in the business in S.E.Asia today. Not a pretty picture, or much optimism to be had: http://splash247.com/latest-splash-chat-live-qa-casts-long-dark-shadow-offshore/
Saw this on my LinkedIn feed: Hornbeck Offshore Services: Escaping Natural Elimination
Of the companies analyzed, Hornbeck is the only operator managing to achieve positive operating cash flow in the GoM region. Cash on the balance sheet should last through year-end 2017.
âWe project that even with the current depressed operating levels, cash generated from operations together with cash on hand should be sufficient to fund our operations and commitments at least through the end of our current guidance period (year-end 2017) without drawing on our revolving credit facility.â
Its active fleet is now all but limited to its newest, most capable vessels - exactly the type of vessels being employed in the Gulf.
The article listed the stacked vessels. Built from company data:
Hornbeckâs active fleet, after its most recent and planned third quarter stackings, consists primarily of its ultra high-spec fleet. Of its fleet, 71% of the vessels are stacked but only 56% of the deadweight tonnage is stacked.
Lol so the eastern boats arenât all they made them out to be. The âPOSâ 320s (the ones Carl thought they took 2 steps backwards when building them) are all active (though not all working or even properly crewed)and all the 300/310s are stacked. I assume the Briarwood is considered an MPSV in this chart?
I can only assume (been proven wrong before though) theyâre not stupid enough to actually cut medical insurance, but outside of that, how much more can they cut so they can keep that magic âpositive cash flowâ?
Those numbers arenât entirely accurate⌠There are several 320âs stacked in Fourchon right now with about 6 guys watching them all. I believe there was going to be another added to the pile as well. As far as the ESG boats; Black Watch is on a 5 yr with Shell, Black Rock has been working in Trinidad, and I believe the Black Foot and Red Rock have also been working spot jobs. Not sure where the disconnect is with the numbers, but its closer to 50/50 between what got stacked. There are fewer boats back there overall however, so it looks like more boats are going back on charter recently.
UmmâŚyeah they areâŚ
I see HOS stock has reached a new 52 week low today. Whatâs the scoop Fraq?
[QUOTE=saltân steel;189759]I see HOS stock has reached a new 52 week low today. Whatâs the scoop Fraq?[/QUOTE]
Stock price is easily manipulated better to look at bond rating. Hornbeck is last I heard CCC+ which equals junk, likely to default.
[QUOTE=tengineer;189947]Stock price is easily manipulated better to look at bond rating. Hornbeck is last I heard CCC+ which equals junk, likely to default.[/QUOTE]
As a curiosity I asked a former bond trader how a CCC+ bond rating would compare to a personal FICO score. He said roughly 500-600 about equal to that of most unemployed people that might have some money in the bank but owe more than their assets. You wouldnât want to loan them money without a very high interest rate and even then youâd be gambling. Bond holders get paid before anyone else. Stockholders are the bottom of the food chain and have no legal rights unlike bond holders.
Can it go any lower?
HOS is fucked along with Tidewater and Gulfmark.
Mr. Gary will rule the world!!!
Starting with the Gulfo de Mehico.
But on a serious note, if HOS goes under what will happen to the scores of new or nearly new boats they built? Will they get scrapped once everyone else has had a chance to buy what they want?
[QUOTE=Bayrunner;190059]But on a serious note, if HOS goes under what will happen to the scores of new or nearly new boats they built? Will they get scrapped once everyone else has had a chance to buy what they want?[/QUOTE]
well one should know that there are different bankruptcy filings. chapter 7 is the type of bankruptcy where the assets of the corporation are all sold and the operations cease. chapter 11 and 13 allow the company to continue to operate but under the oversight of a bankruptcy judge.
in a case of a chapter 7 liquidation, the fallout through the industry would be a bloodbath as more and more lenders to other offshore operators want to get their money back before the asset values plunge to zero so then it becomes a domino effect as more and more companies get forced by their lenders to file. in such a world, as in a nuclear war, nobody can win and everyone losesâŚthe companies, the lenders and shareholders so I believe that we will not see a chapter 7 liquidation being filed by HOS if this downturn continues for another year (which I fully expect). HOS is big enough and has enough market share to convince a bankruptcy court that they have a good chance to survive overall and that judge will agree and then tell the bondholders and other lenders to just be patient and wait after a chapter 11 filing. it would then give protection to a lender to step in to keep the company alive knowing that the capital they put in will have the top priority to being repaid.
I see HOS surviving but smaller companies in the same state of financial health are very likely doomed as their liquidation will not destroy the industry. I just wished we could see behind the iron curtain into the state of ECOâs financial health? How leveraged is Massa Gary? How much money has he borrowed before the downturn? Most operators do not self finance all their growth especially when money is cheap so I expect Gary to be in hock quite deep but then don Chouest is Darth Vader who possesses âthe forceâ to bend the will of those he owes money to.
I have not ruled out the resurrection of the old Ensco business model. Imagine a Galaxy where one phone call gets you all of the marine assets you need for your drilling operation. My twist on the old business model will be the addition of logistics and dock space. I must say all of these new drill ships will look nice painted orange.
Only then will the Death Star be complete!
Iâm hearing that Galaxy 7 isnât so cool nowadaysâŚsomething about a recall.
If it is any consolation, it is not only US companies that is struggling: http://splash247.com/rokke-presses-ahead-rem-merger-eyes-osv-consolidation/
This consolidation may result in the center of the OSV business moveing south. I.e. from Sunnmore (Aalesund and Fosnavaag) to Rogaland, Kristiansand and even Oslo.
There are also US players looking at picking up top end assets cheaply, but so far it appears to be âfinance acrobatsâ only.
The Bayou boys appears to have enough problems at home.
One of the bayou mafiaâs problems will be finding trained and qualified crews who may or may not come back after the suitcase parade exodus that has been going on for the last year.
[QUOTE=ombugge;190110]If it is any consolation, it is not only US companies that is struggling: http://splash247.com/rokke-presses-ahead-rem-merger-eyes-osv-consolidation/
This consolidation may result in the center of the OSV business moveing south. I.e. from Sunnmore (Aalesund and Fosnavaag) to Rogaland, Kristiansand and even Oslo.
There are also US players looking at picking up top end assets cheaply, but so far it appears to be âfinance acrobatsâ only.
The Bayou boys appears to have enough problems at home.[/QUOTE]
my buddy Kjell Inge Røkke is the new Darth Vader of the industryâŚtoday the North Sea and tomorrow the GoM
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[QUOTE=saltân steel;190113]One of the bayou mafiaâs problems will be finding trained and qualified crews who may or may not come back after the suitcase parade exodus that has been going on for the last year.[/QUOTE]
oh theyâll be back and will continue to eat that famous shit sandwich when there is enough cash stuffed inside of it
I donât know if the bayou mafia companies will be able to stuff enough cash in that shit sandwich for the same people to some back. Even some of the better ones did a pretty good job of shitting all over their crews that they âcaredâ so deeply about as things turned down. I would think if anyone comes for the cash the next time around it will be the guys I worked with that are GOM oilfield through and through and those outside the oilfield with a twinkle in their eye that have never experienced the high level of BS that comes along with the high pay.
Naw theyll just get waivers to hire foreigners at 1/3 the price of an American mariner.
I donât know how the foreign Mariners afford those classes, many American Mariners can hardly afford them.