Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Trico Marine Services (TMAR) -- Ignore unavailable to you. Want to Upgrade?

To: JZGalt who wrote (537)	7/10/1998 6:55:00 PM
From: D.J.Smyth	Read Replies (1) \| Respond to of 1153

on one hand TDW is attemtping to keep new competition from the gulf and elsewhere (new supply boats entering the gulf have a tough time being profitable below $7000 a day - and TDW with an aging fleet and no debt can afford to sqeeze at least temporarily) by hyping the downside, and on the other hand they're attempting to sooth shareholders by letting them know everything is fine. a fine line. TDW did help start this malee. Most of TMAR's debt is associated with new boats that are already under contract. these boats can run profitable at $7.5K a day since they're working under two and three year contracts off of Brazil and the North Sea and the contract day rate was stipulated prior to delivery (according to TMAR). TMAR's retrofitted boats in the gulf aren't under severe debt obligation and are now revenue positive whereas they were not revenue positive last year being drydocked. the problems remain; there is a limited supply of boats in the gulf with X demand. X demand isn't shrinking for gas, demand has slightly shrank for oil, but not significantly. boat supply is also now shrinking as new boats scheduled for delivery to the gulf and elsewhere are being postponed given the day rate situation and the price of oil. oil/gas companies can squeeze a lower day rate, but only so far given the limited supply of boats. i suppose the folks on the rigs can stop using toilet paper, stop eating - starve to death, not replace broken parts and let the rigs go to crap. doubtful. rigs will shut down before than happens. and a shut down rig means a shut down boat, but a shut down boat = practically zero expense to the bottom line, so overall the boatmen remain significantly profitable on the boats that remain in service. you can run 67 boats at TMAR (as in 97) and make $2.11. or you can run 100 boats at TMAR (this year) and make $2.00; but to make only $2.00 you've got to (a) have poor management, (b) gas price drop off in concert with further decreases in oil prices, and (c) boats breaking down. One variable may occur of the three, but not all three at once. TMAR's management has been doing this too long to screw up on the two counts they can primarily conrol (a) and (c). they can't control (b), but they can limit its affect to the bottom line. institutions are possibly shorting TMAR's ass having loaded up on puts or written $20 calls by shorting then finding a dink at Furman Selz to justify it. maybe we'll see some recovery after the 17th. how can Furman Selz justify their report when they had a "buy" on TMAR when it was trading above $30, and a "hold" and $15? i realize that oil has dropped $5 a barrel over the past twelve months. however the net cost of producing the oil has also dropped over the past five years nearly the same degree.