India-problemer for Shelf

StephanDerrick
SHLF 09.03.2023 kl 08:41 1618

Shelf Drilling falt 6,5 prosent til 31,10 kroner i går. Kursfallet kan knyttes til rapportene om nye lovforslag i India, som kan føre til store forstyrrelser i markedet for offshore-rigger. Upstream trekker frem Shelf Drilling som et av selskapene som kan bli mest påvirket, ifølge TDN Direkt.

India kan skape forstyrrelser i riggmarkedet
https://www.finansavisen.no/energi/2023/03/08/7991950/india-kan-skape-forstyrrelser-i-riggmarkedet

"I India kan et nytt lovforslag, som blant annet involverer aldersgrenser for jackup-rigger, skape betydelige forstyrrelser i markedet for offshore-rigger."

Niel
09.03.2023 kl 08:53 1563

Jeg tror dette er bare støy på veien.

Det statlige indiske oljeselskapet har flere kontrakter med riggene til Shelf. Dette blir å skyte seg selv i foten. Da får de ikke produsert olje.
Tror dette vil gjelde hovedsakelig shipping fordi India har veldig mage verft og de ønsker å selge skipene sine.
Mrholmes
09.03.2023 kl 08:54 1555

Kommer ikke til å skje, India skriker etter energi og folket fyrer med bildekk😶
Niel
09.03.2023 kl 09:19 1481

Market Comment: Brent/WTI trades down 2/2 cents this morning from last close to USD 82.64/76.64 per barrel (-0.03%/-0.02%) following the -0.8/-1.2% loss yesterday. The WPST by DOE was released yesterday showing the first draw in eleven weeks. Crude -1.7m barrels, gasoline – 1.1m barrels, and destillates +138k barrels. US natural gas fell -5.1% yesterday to USD 2.551/mmbtu, and European gas prices, Dutch TTF (APR22), ended the session at EUR 42.339/MWh (-2.4% from EUR 43.37/MWh). XLE/OIH, benchmarks for E&P and oil service, fell -1.0%/-1.6% yesterday vs S&P 500`s gain of +0.1%.

Shelf Drilling (Buy, TP NOK 43)
• 2-year contract for Scepter at c. USD 150k/d + comment on discussed India Bills
Shelf Drilling announced after close yesterday a two-year contract (+ one year option) with an undisclosed operator (we believe this is Chevron) for the premium jackup Shelf Drilling Scepter (2008 built, 350ft WDR). Contract value is stated at USD 118m, equivalent to a gross dayrate of c. USD 162m. Assuming USD 8-12m for mobilization gives a net dayrate of c. USD 145-150k (FSest. average USD 135k over the period). While Nigeria is high(er) cost, that’s another solid date point in the jackup market. The jackup is currently idle in Singapore having come off its previous contract in Vietnam in July 2022. The rig will undergo prep and mob to Nigeria, with the contract expected to start in May-23 (FSest. Jul-23).

SHLF sold off 6.5% yesterday, having been down as much as 11% intra-day. The sell-off came on the back of news out of India yesterday (in media like Upstream) that two Bills were in the works also where to included age limitations for jackups also (ships main motivation for the Bills it appears). In effect, the Merchant Shipping (Amendment) Bill and the Coastal Shipping Bill which are in the works seek to classify rigs (MODUs) in the definition of “vessel”. With an age limitation of 21 year in such a case being applicable for jackups in India, we understand.

There have been previous attempts to put age restriction on rigs (the Directorate General of Shipping) but following representations from industry and the oil ministry, as we understand it, rigs were excluded. Currently we count 34 jackups contracted in India, of which 23 will fall for the age restrictions, if implemented.

While it is difficult to have an opinion on Indian politics and outcome for these Bills. It is clear though the imposing such restriction will have 1) a dramatic impact on Indian oil and gas production (thus leading to even more dependence on import (vast majority imported already)) seeing that a majority of the jackups operating in India are older than 21 years. 2) have a dramatic positive impact on benign jackup dayrates globally if ONGC were to (seek to) replace the 23 rigs we count as to old in an age restricted India.

Given the dramatic (economic) impact imposing age restriction will have, we question whether this will be implemented. Remember: rigs already are strictly regulated under international (and national) rules and regulations, including requirements for recertifications every 5th year as governed by ABS and DNV. We have seen voluntary implementations of age restrictions in rig tenders in the past in various jurisdictions. Though, they have a (100%) tendency to be implemented in softer market (for rigs) and removed when the market tightens (dayrates increases). Funny how economics ends up being a governing factor. Weighing the likely outcomes, we would be surprised if age restrictions came into force. As such we see the sell-off as a buying opportunity. The same goes for the credit story; any sell-off of the SHLFDI 8 ½ is a buying opportunity as we see multiple pathways to refinance the debt stack already this year. With a call price of 102, implied yield to call by end of 2023 is 19.4% or 1439bps basis current mid-price of 94c.
Niel
09.03.2023 kl 09:20 1479

Blir spennende å se hvordan ONGC skal erstatte 23 rigger i India om dette skulle bli vedtatt.

Som sagt, bare støy.
StephanDerrick
09.03.2023 kl 10:11 1402

Samtidig så er implikasjonene veldig store for Shelf dersom lovforslaget blir vedtatt.
Inntil avklaring foreligger vil nok mange være forsiktige med aksjen.
jadden
09.03.2023 kl 10:51 1323

Niel sitt innlegg er avklarende så det holder! Bare støy som vi ikke kommer til å høre mere til. Konsekvensene er så store at India ikke vil gå foran og påføre seg selvskudd, denne saken er basert p uvitenhet og blitt til minst fem høns.
danni10
09.03.2023 kl 11:07 1276

Det er en "and"! Indien kommer ikke til at vedtage et lovforslag, der fra den ene dag til den anden vil lægge en meget stor del af deres offshore-produktion i graven. Man kan forestille sig vedtagelsen af en lov, hvor der bliver givet dispensationsmulighed eller et lovforslag, der ikke gælder igangsatte kontrakter. Men sandsynligheden for vedtagelsen af selv et modificeret lovforslag må anses for lave. Indien vil næppe vedtage en lov, der medfører markante ratestigninger. Worst case vil Shelf kunne omplacere sine platforme til andre lokationer, hvor raterne i øvrigt er betydeligt højere end i Indien.

Så mon ikke markedet ret hurtigt vil glemme "støjen" fra Indien og fortsætte med at reprise Shelf til højre priser. Indien-historien vil hurtigt fortabe sig og Indien-risikoen ved Shelf-aktien vil vurderes på lige fod med andre risici som 3. verdenskrig, olieprischok etc. Hvem siger, i øvrigt at der overhovedet kan komme en afklaring på den slags lovforslag. Der kan gå år inden den slags love vedtages.
BIFFogBÆRNÉ
10.03.2023 kl 16:42 1010

Jeg tror du har rett.

Jg Solgte på indianyhetene. Angret litt... men jaggu fikk jeg kjøpt meg inn idag. På lavere. Og tjente litt cash