ABAN Offshore : Savant Sir Advice Pls
- Thread starter rajeabc
- Start date
Hi PT,
Movement On Either Side Gets Overdone.....My Statement About Some Retracement Of The Downside Is Because Expiry Is Not Very Far.....Therefore Atleast Half Of Downside Is Always On The Cards.
@Sumo,
I Have Checked On The Pricing & Aban Pearl Didn't Constitute 26%...
I Think There Is Some Error In Reporting Somewhere....Maybe It Constituted 26% When All The Rigs Weren't Deployed....For Now It Seems All The Rigs Are Deployed....
Moreover, Company Has To Still Make A Statement....Perhaps They Will Give A Better Picture Of Top & Bottom Line That Might Be Affected.....& How Much They Intend To Recover From Rig Insurance & If They Have Any Other Insurance Towards Loss Of Business....
Since They Do Carry A Lot Debt On Their Balance Sheet....Servicing Of The Same Will Be Affected.....
Going Forward....Crude Should Be Heading North From 68-69 Levels....& Looks Like A Lot Of Exploration Companies Are Quite Busy....Looking At The Business Cycle...There Is Always A Possibility Of New Acquisitions...Which Will Probably Get Quickly Deployed.
In Short...We Could Expect A Few Good News Among The Spate Of Bad News That We Have Been Bombarded With....
Happy & Safer Investing
SavantGarde
Movement On Either Side Gets Overdone.....My Statement About Some Retracement Of The Downside Is Because Expiry Is Not Very Far.....Therefore Atleast Half Of Downside Is Always On The Cards.
@Sumo,
I Have Checked On The Pricing & Aban Pearl Didn't Constitute 26%...
I Think There Is Some Error In Reporting Somewhere....Maybe It Constituted 26% When All The Rigs Weren't Deployed....For Now It Seems All The Rigs Are Deployed....
Moreover, Company Has To Still Make A Statement....Perhaps They Will Give A Better Picture Of Top & Bottom Line That Might Be Affected.....& How Much They Intend To Recover From Rig Insurance & If They Have Any Other Insurance Towards Loss Of Business....
Since They Do Carry A Lot Debt On Their Balance Sheet....Servicing Of The Same Will Be Affected.....
Going Forward....Crude Should Be Heading North From 68-69 Levels....& Looks Like A Lot Of Exploration Companies Are Quite Busy....Looking At The Business Cycle...There Is Always A Possibility Of New Acquisitions...Which Will Probably Get Quickly Deployed.
In Short...We Could Expect A Few Good News Among The Spate Of Bad News That We Have Been Bombarded With....
Happy & Safer Investing
SavantGarde
This is what I found >
Loss of Aban Pearl a big blow
Aban Offshore Ltd (Aban) lost its prime asset Aban Pearl that was the
only semi submersible rig in the companys asset portfolio. It was the
highest revenue earning asset for the company with a rate of $3,58,000
per day and ~80% operating margin with the contract extending up to
October 2014. With the loss of this asset the earnings visibility has
been severely impacted. This will also delay the recovery for Aban.
Loss of Aban Pearl to severely impact the performance
Aban Pearl was deployed off the coast of Venezuela with PDVSA
and was the highest earning asset for the company earning
$3,58,000 per day with 80% operating margin. The loss of the asset
would impact the revenues (11 months) for FY11 by ~ Rs 505 crore
and lead to a drop in EBITDA of ~ Rs 404 crore. It has also wiped
out the future earnings potential from the asset. The loss could not
have come at a worse time as the company is currently under strain
due to its large debt and servicing capabilities.
Valuation
Loss of Aban Pearl would severely impact the earnings and profitability
over the next two years and lead to reduced earnings visibility. However,
the current market price has factored in the impact of the loss.
Insurance status check
Aban Pearl was a 32 year old semi submersible rig that was
acquired in Q3FY08 and refurbished. The value of the asset was
~Rs 1150 crore. The company had provided depreciation of ~ Rs
121 crore till date. Balance value in the books was ~ Rs 1029 crore,
which would be reduced from the gross block of assets and
charged as extraordinary loss in FY11.
As the rig was insured by Aban we have assumed that 75% of the
asset value would be recoverable i.e. ~Rs 772 crore. This would be
set off from the extraordinary loss. Hence, the actual loss could be
to the tune of ~ Rs 257 crore.
However, in the event the company receives a lesser amount as
compensation then the earnings could be further impacted on the
downside.
In the event that Aban has to incur expenses to retrieve the debris
of the wreckage, it can recover the same from the insurance
companies.
However, the company does not have insurance for loss of profit.
Hence, it does not have any protection from the loss of earnings.
Present fleet status
After the loss of Aban Pearl, the present fleet of Aban comprises 15
jack-up rigs, three Drillships and one Floating production unit. Out
of the current fleet, three vessels are idle and contracts for another
two vessels are expiring in May 2010 and June 2010. Hence, five
out of its 19 vessels i.e. almost 1/4 of its fleet would be idle. All the
idle vessels are currently under marketing and are expected to be
placed on long-term contracts during the course of FY11.
Loss of Aban Pearl a big blow
Aban Offshore Ltd (Aban) lost its prime asset Aban Pearl that was the
only semi submersible rig in the companys asset portfolio. It was the
highest revenue earning asset for the company with a rate of $3,58,000
per day and ~80% operating margin with the contract extending up to
October 2014. With the loss of this asset the earnings visibility has
been severely impacted. This will also delay the recovery for Aban.
Loss of Aban Pearl to severely impact the performance
Aban Pearl was deployed off the coast of Venezuela with PDVSA
and was the highest earning asset for the company earning
$3,58,000 per day with 80% operating margin. The loss of the asset
would impact the revenues (11 months) for FY11 by ~ Rs 505 crore
and lead to a drop in EBITDA of ~ Rs 404 crore. It has also wiped
out the future earnings potential from the asset. The loss could not
have come at a worse time as the company is currently under strain
due to its large debt and servicing capabilities.
Valuation
Loss of Aban Pearl would severely impact the earnings and profitability
over the next two years and lead to reduced earnings visibility. However,
the current market price has factored in the impact of the loss.
Insurance status check
Aban Pearl was a 32 year old semi submersible rig that was
acquired in Q3FY08 and refurbished. The value of the asset was
~Rs 1150 crore. The company had provided depreciation of ~ Rs
121 crore till date. Balance value in the books was ~ Rs 1029 crore,
which would be reduced from the gross block of assets and
charged as extraordinary loss in FY11.
As the rig was insured by Aban we have assumed that 75% of the
asset value would be recoverable i.e. ~Rs 772 crore. This would be
set off from the extraordinary loss. Hence, the actual loss could be
to the tune of ~ Rs 257 crore.
However, in the event the company receives a lesser amount as
compensation then the earnings could be further impacted on the
downside.
In the event that Aban has to incur expenses to retrieve the debris
of the wreckage, it can recover the same from the insurance
companies.
However, the company does not have insurance for loss of profit.
Hence, it does not have any protection from the loss of earnings.
Present fleet status
After the loss of Aban Pearl, the present fleet of Aban comprises 15
jack-up rigs, three Drillships and one Floating production unit. Out
of the current fleet, three vessels are idle and contracts for another
two vessels are expiring in May 2010 and June 2010. Hence, five
out of its 19 vessels i.e. almost 1/4 of its fleet would be idle. All the
idle vessels are currently under marketing and are expected to be
placed on long-term contracts during the course of FY11.
it is very surprising that aban has not insured its revenues for
atleast 2/3 years. this loss of revenue is going to put tremendous
strain on its finances to honour debt repayment schedule.
the stock may hv still signficant downside as many large investors may
take a call to exit. real strong support wl come in 630/650 zone.
i dont mean that the stock wl go to that level in coming 2/3 days but
eventually it wl.
yesterday, i was hoping that stock wl get back to 900 level as i was
envisaging that aban wud hv insured the revenue stream as well. but
that is not the case .:lol:
atleast 2/3 years. this loss of revenue is going to put tremendous
strain on its finances to honour debt repayment schedule.
the stock may hv still signficant downside as many large investors may
take a call to exit. real strong support wl come in 630/650 zone.
i dont mean that the stock wl go to that level in coming 2/3 days but
eventually it wl.
yesterday, i was hoping that stock wl get back to 900 level as i was
envisaging that aban wud hv insured the revenue stream as well. but
that is not the case .:lol:
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