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Except for an announcement on 27 Nov where Scorpion said that the Semisuub order is at risk and they are in discussion with KepCorp, cannot find anything that order is cancelled.
http://cws.huginonline.com/S/136299/PR/200811/1273652_5.html
This rig has a contract with Petrobras of Brazil......so its not as if it has no work when its completed.
Bear in mind that KC has, in the not too long ago past, when the rig building market was depressed, been innovative with structuring payment for their clients.........including providing financing to their customers, taking joint ownership of the rigs...etc. So, I believe discussions are still ongoing between KC and Scorpion as it does not benefit either party to cancel.
However, even if the order is cancelled, consider this.....
Order value to KC is USD405m......Scorpion has so far paid USD74m downpayment to KC and 3rd party equipment suppliers.......this is about 18.3% of the value of KC contract.....see attached announcement. So, my guess is KC's downpayment is between 12 to 15% of 405m.....i.e approx 49m to 61m in the bag.
Current price plunge of KC...opportunity or falling deeper to the abyass? ......something to think about?
shorted @ 3.83, 3.84..
time to make money..
shorting this fella..
as Scorpion offshore has come fwd to say they confirmed reports they will scrap newbuild rig job with Kep corp..
Tx Ak. No immed os trip for me. Even if go, will try to get cheap KC first.
ozone: After the last SPC experience...when you call out a price, I get scare.
AK opine that, loong is the word. Go for yr tour loh.
No call for anything, but AK view. I didn't go for os tour but just dun watch the screen as usual.
Wanted to go Aussie to visit my former colleague who now operating a restarant in Perth,
as now S$ is higher. But few wedding dinner in Dec disrupted my plan.
$4 broken. Where got so many cheap KC going around???
<$4 whisker away... but i hope it can touch the recent low of $3.35
ozone2002 ( Date: 28-Nov-2008 11:33) Posted:
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shortist/s......no need 2 make noises 2 hope px goes down.....when bad news out, px goes down n when good news out, px goes up.....noises r sickening.
Why are rig builders getting hit so hard?
| Written by The Edge |
| Friday, 28 November 2008 13:51 |
http://www.theedgesingapore.com/index.php?option=com_content&view=article&id=985:why-are-rig-builders-getting-hit-so-hard&catid=982:the-edge-2008&Itemid=54
This is a great money-spinner for those who sold short at yesterday's high...
NickyNg, did you hop on this one?... hehehe... 
below $1, sell backside liao...hahahha!
ozone2002 ( Date: 28-Nov-2008 11:33) Posted:
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Crude oil will burst to USD 18 in the short term.
ozone2002 ( Date: 28-Nov-2008 11:33) Posted:
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ha ha, if can loong, avoid marine industries loh, at this dull n rull market.
One of my TR went on leave liao.
Cancellations leads to .......
Plunging stock price ( a headache for those owning this stock )
For the shipyard workers / contractors , this means less work - so maybe retrenchments?
Wat worries me is this.....'spark a cascade of cancellations in the industry'. Anymore and we see it dive further.
below $4..sell house sell car and whack kep corp..
oil will balloon to >$200 in the long term..
Keppel Corporation Ltd: S$1.2bn orders "under review"
Summary: Keppel Corporation (Keppel) reported that it was in talks with clients (Scorpion Offshore, Seadrill and Ezra) to review four projects worth about S$1.2b due to the recent unprecedented dislocation in the oil industry. Non-refundable deposits of 5-20% have been paid to Keppel and work has not started on any of these projects. While discussions are still in progress, we make some postulations that: 1) Scorpion will delay (vs. cancelling) as the semisub under review was to be chartered out to Petrobras; 2) Seadrill will cancel its 2 Jackups thus forfeiting its 15% deposit in view of over supply and; 3) Ezra will likely cancel the vessel to preserve cash. Keppel has appreciated about 10% since our resumption of coverage report last week, but with the likely scenarios above, our SOTP falls to S$5.05 (prev. S$5.24) as we think earnings will be affected. There is also the concern that this might spark a cascade of cancellations in the industry. As such, we downgrade Keppel to a HOLD(<10% upside). (Kelly Chia)
Ezra Holdings Ltd: Prudent cash management.
Correction......
2nd line on my last post.....KCI current order book is S$12.5B.....(not USD12.5B)....i.e. orders under consideration is about 10% of orderbook.
Apologies
Current KCI price drop approx 12% (currently).
Value of orders in discussion - 1 semi sub, 2 JUp and 1 vessel - USD861m,.....approx 7% of total order book of USD12.5B.
Construction has not commenced.
Downpayment of rigs on order is usually >10%. Profit margin on rigs building usually <10%.
So, even if order cancelled and KCI gets to keep the down payment, KCI revenue will be impacted but would stand to make more $$$ for doing nothing.
Just a different view point.....think about it......caveat emptor.
strike1147 ( Date: 28-Nov-2008 09:13) Posted:
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