TDW's Newbuild Announcement (read it Slider)
CEO William O'Malley announced: "the Board has approved a newbuild program of up to 25 large supply and anchor handling supply vessels at an estimated cost between $250-$350 million. These boats are expected to be build over the next 2 years, although bids have not yet gone out to shipyards, nor have designs for the new boats been fully developed. Mr. O'Malley expects that, although the company remains debt free and has a $200 million available credit line, the entire cost of this program can be funded through current internal cash flows and the $159 million cash on the balance sheet."
Further, "Mr. O'Malley said (Jan 20th) that several of these vessels will be built after consulting with large alliance customers to insure that these new boats can meet customers' long term needs, particularly in deep water."
From what has been reported, it is highly likely contracts will be let over an extended period and it is assumed that the market will continue to strengthen and utilization rates and day rates will continue to climb. Since TDW will be taking its own good time in executing their new boat plan and paying for it with little or NO DEBT, the company is will experience minimal financial risks. Since there is relatively little newbuild Offshore Supply vessels (OSV) construction at present,TDW may expect competitive pricing and high quality work from experienced crews. Further, it appears Mr O'Malley has shrewdly left his options open. He can expand or reduce the newbuild program as markets and the Company's financial resources dictate. Sounds good to me! FWIW
Bottom Line: Mr. O'Malley AND Mr. Holloway are preparing for the future and PART of that future is Deep Water exploration.
Incidentally, with the U.S. market strengthening and foreign markets expected to strengthen, Merrill Lynch views the current TDW price decline as a great opportunity to buy the stock, suggesting the stock price could rise toward $50 during the next 12 months.
O/T: MOUTH, again, I suggest Mr O'Malley and Mr Holloway MAY KNOW just a little more about their respective businesses than the Street or the PARROT! >vbg<
Have a good day, little cretin!
Do Mr. O'Malley's words: "particularly in deep water" hold any meaning for you? It's rhetorical, dummy!
SargeK |
