Heard through the grapevine that Pacific Drilling has been notified of termination of their only working rigs contract? Any one confirm?
If they weren’t done, this for sure ends the company.
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They’re announcing their second quarter results on the 7th of August, might hear something about it then.
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Now might be a good time to short on drilling stock.
That’s interesting, I wonder if the future contract includes a mobilization rate. If not that seems like a gamble that a) Pacific still exists as a solvent company in 2021, and b) Pacific has the tens of millions cash on hand to successfully unstuck the rig at that time.
Good points.
Also if Joe Biden wins in November, which is looking likely, how long will it take him to get his offshore drilling ban in place? Surely that will mean these drilling contacts will be cancelled?
Perhaps oil and gas companies are postponing contracts to see if he wins.
Joe is not going to win lol
81 million in future revenue will not keep the company afloat.
Biden said no NEW permits which is an empty threat. They can’t economically drill with existing permits now due to the low oil price.
Unlikely. The official campaign policy is no new drilling permits on public lands or waters, and a moratorium on arctic drilling. The US isn’t Venezuela or Brazil (yet, I don’t think) where the government can just grab existing offshore drilling programs and say they are ours now, shut it down. (2010 Moratorium notwithstanding, that was different). There are far too many hundreds of private companies involved, domestic and foreign.
And you can bet that lease sales will continue up until inauguration day. Current leases and drilling permits extend typically for years in the future. If Biden wins I would not be the least bit surprised if permit applications increase and are fast-tracked for approval before the New Year.
That being said, it is one of many campaign promises directed at appeasing the base. Like eliminating birthright citizenship, eliminating funding for sanctuary cities, and building a wall that Mexico will pay for. It riles up the supporters, but is unlikely to be meaningfully carried out.
Ban or no, even restructuring may not save Pacific. Restructured debt still needs to be paid, and that requires rigs on contracts, and contracts above breakeven.
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Pacific Drilling SA is owned by an Israeli billionaire, who also own Tanker Pacific in Singapore and has mining interests.
It’s corporate HQ is in Luxembourg, with operational HQ in Houston and operating internationally, not only in US GoM.
The worldwide downturn in drilling activities due to low oil prices and over supply has more influence on it’s activity (or lack thereof) than anything to do with US politics.
PS> It is not likely that activity in deep waters will improve in the near future (if ever),
Mr. Ofer is not likely to go broke though.
Mr. Ofer, barely owns any of the company with the last two restructures. Quantum Pacific is his golden goose.
That’s good, Mr. Ofer got out at the right time. Those Kind of instincts are why he is a billionaire.
Now, if he wants to, and the price is right, he can buy it back for pennies on the dollar.
He still appears to have control though. (Maybe he owns enough through one or more of his many holding companies and Tanker Pacific??)
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He was Pacific’s largest shareholder (~70%) before the 2018 restructure. That restructuring saw equity shareholders completely wiped out. The deal created by Ofer (via Quantum) got him 20% of the new debt offerings and about 10% minimum of the new equity shares. A little research shows that about 80% of current shares are held by institutional shareholders. He’s no doubt still very influential, but his debt and equity holdings are still subject to default and cancelations along with everyone else’s if they have no revenue and break covenants.