Re: nincs cím

Tartod még az ORIG-et?

Ma olvastam egy cikket róla, nem túl biztató hosszútvára (legalábbis a cikk alapján, a valóságban nem tudom):

Ocean Rig: Pros And Cons

Oct. 17, 2015 7:24 AM ET | 15 comments | About: Ocean Rig UDW Inc. (ORIG), Includes: DRYS

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Summary

Ocean Rig is one of the worst-performing drillers this year.

The company has a young fleet and no immediate liquidity problems.

However, there are multiple red flags that make this stock an "avoid".

Ocean Rig (NYSE: ORIG) is one of the worst performers among offshore drillers this year, down 73% year-to-date. In fact, only one offshore driller among those who are still listed on NYSE and NASDAQ performed worse - Paragon Offshore (NYSE: PGN). Does it have chances for a rebound?

Pros

All Ocean Rig's drillships were built in 2011 or later, so the company has a very young fleet. Ocean Rig also possesses two semi-subs, which were built in 2001 and 2002 - they are not old as well. The company has an interesting position regarding its semi-subs, but we will get to it in the "cons" section. Ocean Rig's drillships have good contract coverage for the current environment. In 2016, OR Olympia and OR Mylos (more in the "cons" section) will finish their current jobs. Other rigs will work further, and OR Skyros has a job with Total (NYSE: TOT) until 2021.

I believe that the industry is shifting toward drillships vs semi-subs. Drillships win in mobility, deck load and deck space. The fact that the majority of Ocean Rig's fleet consists of drillships could be an advantage. I am saying "could be" instead of "is" because Ocean Rig's competitors have also acquired newbuild drillships and also because it remains to be seen whether drillships have a decisive advantage over semi-subs in current environment.

Ocean Rig was able to postpone the delivery of two rigs to 2018 and 2019. The company has another rig under construction, OR Santorini, which, according to the latest fleet update, is scheduled to be delivered in 2017. Most drillers were able to delay rig delivery, and Ocean Rig is no exception. For the industry as a whole, it is probably not great, as all those rigs will reappear in 2017 and beyond. From a short-term point of view for Ocean Rig, this is positive, because the company has time to acquire contracts for its rigs.

Cons

Young fleet and good contract coverage are great. However, the company's shares would not have been under such pressure without negative catalysts - and there are multiple such catalysts.

First, the company has excessive debt. Ocean Rig's debt stood at $4.37 billion at the end of the second quarter. The first significant debt maturity of $871 million is in 2017. This does not look great if we take into account other negative catalysts that will put pressure on the company's cash flows.

The latest fleet update had a crushing effect on Ocean Rig's shares. The company stated that if it did not find work for semi-subs Eirik Raude and Leiv Eiriksson after their current contracts expire, these rigs could be scrapped. Scrapping is just one of the options, but it is very strange to see it mentioned. However, these rigs were built less than 15 years ago, and market participants clearly believed that they remained useful assets.

Ocean Rig also stated that OR Olympia, which has a contract with ENI, could be stacked if it did not have contract by the end of the current job. Ocean Rig's stance differs from what we've seen with most other drillers, who stack very old rigs but still do not send them for scrapping. It is obvious that Ocean Rig does not want to pay for the special periodic survey for the abovementioned rigs, but scrapping rigs is a radical decision.

The fleet update contained other bad news. The company received a notice of material breach under the contract for OR Mylos, which currently works in Brazil. The breach should be remedied within 75 days or the client could terminate the contract. Ocean Rig stated that it intended to defend its rights under the contract. The wording of the press release does not give us much to speculate about, but one thing is certain - the client wants to get rid of the contract. Hopefully, we will have more clarity on this topic when the company reports its third-quarter results.

Another worrying fact is that DryShips (NASDAQ: DRYS) is owning 40.4% of Ocean Rig. DryShips is in serious distress: the shipping company has recently decided to sell 17 vessels and take an impairment of $795 million. The remaining fleet is classified as held for sale. It's difficult to predict what exactly will happen to DryShips' stake in Ocean Rig, but I would like to mention one important fact: George Economou, CEO and Chairman of DryShips, is also the CEO and Chairman of Ocean Rig.

Bottom line

Ocean Rig is a lottery ticket, not an investment. I view its shares as a vehicle for very short-term trading, but won't bet on its survival. I must admit that there are elements for the bull case in Ocean Rig's story - good fleet, healthy liquidity for the short-term, decent contract coverage. However, there are things that are obvious red flags. The company enters the difficult period with too much debt. For some reason, the company highlights the fact that it could scrap two rigs that are not that old at all. This may be a genius decision, but currently it look dubious. And, most of all, I don't like the story with DryShips. Both facts bother me - DryShips, which is clearly devastated, owning 40.4% of Ocean Rig and George Economou being the CEO of both companies. A dramatic increase of oil prices and drilling activity will make my thesis wrong, but I believe that this is a very unlikely scenario.

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