No he really isn’t…TLDR: the numbers don’t work. PDC projects themselves to exit restructuring and have to spend the entirety of their 5 year exit loan in 1.5 years just to stay afloat.
So, taken directly from the Chapter 11 filing last updated November 5th:
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Plan to exit restructuring with $80mil exit funding facility
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Drillship breakeven costs of $130-$180,000 per day
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Stack fleet cost of $85,000 per day ($45K+7.5+7.5 for Scirocco/Mistral/Meltem)+($25K for Bora)
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Khamsin expects to end contract and come off-rate early Nov 2020 (it is now early Nov)
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Santa Ana on standby at $103,600/day until Jan 1, 2021, then $296,000 per day for remainder of 350 day contract
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Sharav is idle until 2Q 2021, then $180,000 per day for 450 days. Idle cost not mentioned but must be between $25-$130K per day
Add that up and taking mid to low range of PDC provided estimates:
- $85K stacking cost
- $130K Kamsin operating cost
- $130K Santa Ana operating cost
- $90K Sharav operating cost
Total for Offshore Costs: $435,000/day
Total for Onshore Costs: undisclosed
Total revenue:
- $325K/day until early Nov (now)
- $103K/day Nov-Jan 2021
- $296K/day Jan 2021-est May 2021
- $476K/day est May 2021 - Jan 2022
- $180K/day Jan 2022- Aug 2022
So for the next 20months PDC projects themselves to lose on average $136K/day , or $81 Million dollars, not counting shoreside or un-stacking costs. And that $80 Million exit loan is repayable quarterly over 5years at 12% interest. PDC has already this year laid off 50% of its offshore workers, cut base pay by 10-12%, and touts their super cost efficient “smart stacking”, so there is limited further cost savings.