Dwight, Good! Also here's a tidbit for offshore drillers. For a shallow water jackup say five years ago, my friend from ENSCO told me that it cost about $14,000/day cashflow to run one of these rigs.
Assume that inflation has jumped that rate 25% to $17,500/day. Well then the amount that day rates exceed that level is the amount of cash flow which a corporation say like ESV or RDC has available to service debt, buy new rigs, run the corporation. But it makes my point that even if day rates fade back a bit in shallow water, these companies are still going to produce large amounts of cash flow....
For e.g., I believe that RDC has 20 shallow water rigs in its fleet. Assume dayrates to be in the $42,000/day area, and that 85% of the fleet is utilized----That would mean that the RDC shallow water fleet would throw off $416,500/day cash flow or $12,495,000/month or $149,940,000/ year from that portion of RDC's assets.....
Sincerely,
Doug F. |
