thanks for your comment Galt. TMAR stated that 70% of all hydrocarbon work comes from GAS production in the GULF, not OIL production. thus, it has been implied by TMAR that their business is more related to the production and pricing of natural gas in the GULF. So, we have a few analysts telling investors to stay away from the gulf for the time being because of the price of oil. obviously, there is some correlation between the price of oil and the price of natural gas, but both are exclusive of the other, i.e., demand for natural gas doesn't follow a straight line relative to the demand for oil, in fact, demand for natural gas has been increasing in recent years with all the new homes being built worldwide, and gas being the preferred method of heating now.
since (a) 60% of TMAR's business has come from the gulf in the past (and according to them this figure will shrink to less than 50% this year) which is dependent more on gas production than oil and (b) natural gas usage in the world is increasing at a greater rate than the useage of oil and (c) more deepwater projects are gearing up in the gulf this year than at any time in the past five years, it would seem that earnings in the gulf would remain flat this year (over $2.00 from the GULF and Brazil) with the North Sea earnings bringing only a premium to the bottom line.
i understand your concern about insider selling in the $20s. but Jefferies, in their analysis give NO reason for projecting lower revenues this year other than possible decreasing day rates for supply boats. supply boats make up one of three main boat segment day rates in the gulf and elsewhere. they don't mention that day rates will be impacted by increasing competition, but only by the price of oil - and they state that shallow water oil rigs in the gulf could sufer the most. but 70% is natural gas! why oil?
interestingly, in my conversation with a Tidewater V.P. he stated that about 80 new boats could be added to the gulf in the next year or two and it was implied that they lowered day rates to keep the competition out. in a similar conversation with TMAR, they stated that given the decrease in day rates and oil prices that a significant number (he didn't know how many) of those new projects have been put on hold. he said new boats entering the gulf wouldn't reach 80 until well into the next century. I JUST WONDER IF TIDEWATER ISN'T FILLING THE MARKET FULL OF MISINFORMATION (AS THEY CAN AFFORD TO DO SO WITH NO DEBT AND AN AGING FLEET) IN ORDER TO DRIVE OUT THEIR HIGHLY LEVERAGED COMPETITORS?
it seems that TMAR took the higher road in upgrading their fleet now in anticipation of higher prices to come rather than the approach of Tidewater and upgrade later. |
