Monthly Archives: August 2017

The offshore rig business has been in a state of decline for more than two years. Even before oil prices started to crash, there was a concern that there were too many rigs fighting to find work. The crash came in the middle of 2014, and the industry has been falling ever since. This past quarter, though, Diamond Offshore Drilling (NYSE:DO) posted the first increase in revenue in a long time.

Here's a look at what happened this past quarter that led to the uptick in revenue, and how that may make investors think differently about this stock.

Image soruce: Getty Images.

Data source: Diamond Offshore earnings release.

The most surprising element of Diamond's most recent earnings report was the increase in revenue. That isn't something we have seen from offshore rig companies lately. The gains came from the company's ability tofind work for two of its ultra-deepwater floating rigs, which started on contract in mid-February, according to Diamond's most recent fleet status report.

Another encouraging sign is that those contracted assets ran at a high utilization rate. Operational efficiency improved to 96.6%. Less downtime means that more days on those term contracts are revenue-generating days, which translates to better profits. Managementhas attributed this to its Pressure Control by the Hour agreementwith General Electric(NYSE:GE)to own and lease blowout preventersto Diamond, rather than Diamond owning the equipment itself.

The reason those higher revenue figures didn't flow to the bottom line was that the companytook a $71 million asset impairment charge related to some of its older vessels that have gone off-contract. Adjusting for these noncash impairments, net income for the quarter would have been $0.45 per share.

Data source: Diamond Offshore earnings releases. Chart by author.

The modest income result and minimal capital spending allowed Diamond to generate $105 million in free cash flow, most of which went to paying down the company's short-term borrowings. With its debt-to-capital ratio of 34% and most of its current rigs contracted to work for at least a year, Diamond is in as good a shape as any other rig company today.

It appears that Diamond's partnership with General Electric on the Pressure Control by the Hour program is reaping notable rewards. CEO Marc Edwards went out of his way to single out the success of the program thus far:

The year-over-year increase is driven primarily by new contracts that ramped up earlier this year, a substantial improvement in our operating performance and our continued focus on cost management. The improvement in operational performance was seen across the fleet. However, I would like to highlight the four Black ships operating in the Gulf of Mexico.

Recall that these rigs are under our unique-to-the-industry Pressure Control by the Hour construct initiated just over a year ago, the benefits of which are now beginning to kick in. For example, the revenue efficiency on the Black ships has increased by over 300 basis points quarter-over-quarter, with BOP [blowout preventer] performance being a significant contributor.

During the past quarter, we drilled a well in the Gulf of Mexico to 31,000 feet, 30% faster than the planned drilling schedule. Part of this efficiency increase is a result of the ongoing reliability improvement we are witnessing because of Pressure Control by the Hour. The relationship with our partner, GE, continues to mature, and we are beginning to realize the benefits of the design for reliability ethos with critical component and system upgrades.

New contracts, high rates of operational efficiency, and the scrapping of a couple of older rigs have allowed Diamond to keep its earnings in positive territory when so many other rig companies' results are in the loss column. To improve its results from here, the company will need to find work for its cold-stacked rigs, which will be harder when having to bid against rigs that are still "hot" -- those that have just gotten off a contract and are ready to work immediately.

That said, Diamond is in pretty good shape right now, and should have the ability to reinvest in the business through either newbuilds or acquisitions. Considering that the stock still trades at a considerable discount to its tangible book value, Diamond is one of the best ways to invest in the return of offshore drilling.

Tyler Crowe owns shares of General Electric. The Motley Fool owns shares of General Electric. The Motley Fool has a disclosure policy.

Read the original post:

Diamond Offshore Posts a Rare Revenue Increase in Q2 - Motley Fool

Submitted News

Sens. Tom Carper, D-Delaware, and Susan Collins, R-Maine, recently introduced the Incentivizing Offshore Wind Power Act, which would provide critical financial incentives to encourage investment in offshore wind energy.

This bipartisan bill would create an investment tax credit that is redeemable for the first 3,000 megawatts of offshore wind facilities placed into service, amounting to about 600 wind turbines.

In the past, Congress has offered a temporary credit for investments in wind power, but the last extension of this credit will expire before Dec. 31, 2019. This credit has been a lifeline to the nascent offshore wind industry. The Incentivizing Offshore Wind Power Act would give the industry the certainty needed to plan investments and maximize deployment of this clean power technology.

Offshore wind energy has the potential to power every home, school and business from Florida to Maine with clean, renewable energy, Carper said. Investing in new offshore wind projects spurs economic growth and has the potential to create millions of good-paying American jobs. It also helps enhance our national security by encouraging domestic energy production and protects our environment and public health by deploying a cleaner source of energy. Im proud to partner with Collins to provide this growing industry the certainty it needs to draw private sector investments in new offshore wind facilities across the country. Making smart investments to move us closer to energy independence is a win-win-win for our economy, our security, our health and our planet.

The legislation defines offshore facilities as any facility located in the inland navigable waters of the U.S., including the Great Lakes, or in the coastal waters of the U.S., including the territorial seas of the U.S., the exclusive economic zone of U.S. and the outer Continental Shelf of the U.S.

The University of Delaware Special Initiative on Offshore Wind estimated that the Atlantic coast holds 330 gigawatts of offshore wind power enough to meet the electricity needs of the East Coast. The expansion of Americas offshore wind industry would provide an opportunity to protect the environment, grow the nations economy and create jobs for people living in areas near the coast.

A detailed summary of the legislation is available at bit.ly/2tWK1Xe.

Read the rest here:

Carper, Collins introduce bipartisan legislation to spur emerging offshore wind industry - Hockessin Community news

(Reuters) - European companies, including some oil majors, have made inroads into the emerging U.S. offshore wind market, as shown by the following list of companies awarded seabed leases so far.

European companies are in italics.

Massachusetts- Vineyard Wind: Avangrid (owned by Spanish utility company Iberdrola (IBE.MC))- Bay State Wind: Danish former oil major DONG Energy (DENERG.CO), New England ultility Eversource (ES.N)- Cape Wind: Boston-based Energy Management Inc.- Deepwater Wind Energy Center: Deepwater Wind (owned by U.S. based investment company D.E. Shaw Group)

New Jersey- Fishermen's Energy Atlantic City Windfarm 1 & 2- DONG Energy project (lease previously owned by RES America)- New Jersey Wind Energy Area: US Wind (owned by Italian renewable energy specialist Renexia SpA)

Maryland- Skipjack: Deepwater Wind (owned by D.E. Shaw Group)- Maryland Project: US Wind (owned by Renexia SpA)New York- New York Wind Energy Area: Statoil (STL.OL)Delaware- Bluewater Wind: Deepwater Wind (owned by D.E. Shaw Group)

Maine- New England Aqua Ventus: Canadian energy and services company Emera Inc. (EMA.TO), U.S. construction company Cianbro Corp., University of Maine, French marine renewables company DCNS

Virginia- Virginia Offshore Wind Technology Advancement Project: Dominion

North Carolina- Kitty Hawk: Avangrid (owned by Iberdrola (IBE.MC))

Sources: U.S. Bureau of Ocean Energy Management; Company websites

Reporting by Susana Twidale and Karolin Schaps

See the original post:

Factbox: European participation in US offshore wind leases - Reuters

by: Irene Sans Updated: Aug 1, 2017 - 6:22 AM

Emily formed early Monday morning, made landfall near Anna Maria Island (close to the Tampa area) in Florida and continued crossing Central Florida during the afternoon and Monday evening.

APP: Download theWFTVWeather App to track the rain

Emily's highest rainfall across Central Florida 2017 Cox Media Group.

"Heavy rain and localized flooding will be the main impacts from Tropical Storm Emily," said Channel 9 Chief Meteorologist Tom Terry.

With only 8 hours from formation to landfall, #Emily is one of the quickest hitting US landfalls in past 30+ years. Only 4 (of 121) quicker. pic.twitter.com/mxgogeVeZl

Stationary line of storms producing minor flooding from N.Brevard- Seminole- https://t.co/pt4LNm9RMO- C.Lake. Avoid flooded streets pic.twitter.com/vraR5DA95R

Here's what it's like driving through #TSEmily, rain is heavy, gusty winds jostling us around on State Road 64 in Hardy County. #wftv pic.twitter.com/FlrDb9RJJh

Emily weakened Monday, becoming a tropical depression at the 5 p.m. bulletin from the National Hurricane Center. The storm will exit Tuesday early morning through southern Brevard county and could gian some strength once it moves over the Atlantic ocean.

TROPICAL STORM EMILY: CURRENT WATCHES AND WARNINGS

Hour-by-hour: Check the forecast in your area

Track the rain: Doppler 9 Radar

Storm Alert 9: Send us your photos and videos (safely) using #StormAlert9

Gov. Scott held a press conference Monday afternoon asking Florida residents to follow the local authorities instructions.

As we know in Florida, storms can quickly develop, bringing severe weather to our state in a moments notice, he said in a press release. We are working closely with the National Hurricane Center and continuing to monitor the storms development and its potential impacts to Florida. We know that heavy rainfall is expected across Central Florida for the next few days. Our focus is on keeping Florida families safe and we will continue to release updates on this storm as it develops.

Lightning: What you need to know

Watch: Why you should never drive with your hazards on

Pronstico en espaol por nuestra meteorloga Irene Sans

Follow our team of meteorologists on Facebook: TomTerry BrianShields GeorgeWaldenberger EboniDeon RustyMcCranie Irene Sans

2017 Cox Media Group.

Read the original:

Emily moves offshore; could intensify over Atlantic - WFTV Orlando

Theres a new fixture in St. Johns Harbour these days.

The Skandi Vinland has secured a multi-year charter with Husky Energy to support offshore oil operations.

The multi function vessels primary scope is subsea maintenance and inspection but it is also capable of standby or installation support and iceberg management.

The all-Canadian crew of 38 (36 Newfoundland and Labradorians) started operations here during the first week in July and will call St. Johns home port for the duration of a ten year charter with Husky Energy.

The ship houses a one hundred ton subsea crane, and two ten million dollar Remotely Operated Vehicles designed to carry out a number of tasks in relation to offshore oil and gas extraction.

Captain Keith Leonard says the brand new ship, which heads back out to sea tomorrow, has been built to the highest industry standard.

Leonard says the ship designers had crew member comfort in mind when the vessel was conceived. He says safety and technology are both state of the art on board making the Vessel second to none.

Read more from the original source:

Skandi Vinland Begins Service in the Offshore - VOCM