patrick.net

E-Man, Pkennedy

Here is a must own stock and a short summary why for your benefit. I have distributed this communication to all my close friends and family so it is after careful consideration.

Investment case, Transocean

•Price driven by news not fundamentals, eventually fundamentals will prevail.

•And boy what fundamentals, 36B in assets, vs 16B in liabilities, a book value of 20B. Your shares are more than free as the assets generate 3B in after tax earnings and 5B+ in operating cash flow. All this for about 15.5B. Earnings are going to be softer, no doubt. It is on a down-cycle, but long term, nothing’s changed. The BV is support for current price, very little downside from here.

•RIG will have no blame or liabilities against them. In fact, insurance covers their physical lost completely (I think there is a 200M+ gain). A few liability contingency from the lost lives will cost the company, but this is hardly material.

•Rig is international and drills all over the world. The domestic drillers will have a challenging ride over the next year. However, RIG only does 10%-15% of its total offshore drilling in the Gulf of Mexico. Thus financially, RIG is in great shape vs. the domestic drillers. If nothing else, long international drillers and short domestic drillers for guaranteed profits although I don't think that is necessary.

•Deepwater drilling is an incredibly lucrative business, which is much more effective and profitable than coastal and mainland drilling. There are only four companies in the entire world that can play in this market.

* eventually the ban would be lifted as the industry employs too many people with broad impact and too much money at stake. Chevron is desparate to have this ban lifted which is a testament that deepwater drilling is inevitable.

I don't know when shares will go to pre BP level, but it will. Buy with confidence. Surest bet in quite awhile

without more detail, I am sure it is the most dangerous area within Richmond (iron trianagle or close to it), that's why the yield is so great and no family in their decent mind would live in a 8-plex in Richmond. The best areas in Richmond is in fact point richmond by the bay and Hilltop Richmond, a little up North past San Pablo. I think is more more commonly referred to as county club vista. Homes up there rent for about 2000-2500 a month, for around 280K-350K.

High yield = high risk. If the yield is so good, why are they trying to unload it. You'll be dealing with applicants and tenants that is generally regarded as the worst there is.

Ok I'm going to bite. But let us know if anything goes horribly wrong on this one :) Obviously we're not holding you responsible, but just in case we miss it! I missed out on the other two you advised on!

I've had a couple of conversations regarding oil with a friend who practices law in texas and deals with oil quite often and he said that he had met up with some people from Petrobras, and that Petrobras company culture has sure come a long ways and now acts and behaves much more like one of the big players. He seemed to think that their business mentality had shifted more towards one of the big oil companies from a "brazil/government owned/smaller player" company.

I'm not sure where they stand right now. My wife in Brazilian and her father is a banker there and he has loved that stock for quite a few years. So it's a stock I've been thinking of getting into at some point. Anyways, if you're ever looking at Petrobras add those two "points" to your consideration!

Thanks for the tip. I've put in a buy order as well! If this were to ever pop like those solar companies you recommended, I owe you dinner.

Ok I'm in at $47.00. I read a couple little legal arguments on this thing and what is covered and what isn't, it looks like all the quipment, a 700M clean up fund and insurance on the personnel lost. The only thing not covered was lost profits from not operating this site for the next 3 years @ 550M, but on the flip side they have the contract to do the relief wells, so that might counter this a bit.

BOYS
have you heard of EMAIL? Please take these discussions private.
You are HIJACKING this thread about a specific property.

Sometimes things need to be hijacked.

@ pkennedy
this whole thing smells like a PUMP-and-DUMP scheme... lolz!

@permanent_marker
Perhaps you should read all of sf_aces comments first. He's one of the only ones that backs up his comments with actually data, and presents the math and logic behind it. vs "It's going down 75% by next year! gut feeling! saw it on fox news! must be true!"

@e-man
The only counter argument for Rig I've seen is "BP is waiting until they have this thing capped, to prevent PR issues, once it's done they're going to try and sue everyone under the sun"

I figure this is a better (longer) term investment than anything I would have picked on my own :P

http://www.reddit.com/r/IAmA/comments/cszc0/iama_gulf_of_mexico_drilling_engineer_ama/

Take it with a grain of salt, but interesting none the less. An interesting Q&A from a driller in another company.

Ok I have a most likely simple question.

What is the difference between RIG and RIGN.VX. VX is the swiss exchange, but why are they so divergent? And the swiss version only appears to have started sometime in june?

RIG today +$0.81, Day's Range: 44.30 - 46.30
RIGN.VX today -$2.65, Day's Range: 46.54 - 48.59

Volume is incredibly low, but they both share the same news, at least on yahoo. Indices includes ^DJUSEN, which means it's oil and gas related. What am I missing?

You were waiting for $42? Could have told me that :) I have no idea where this is going, it looks semi positive. They have earnings shortly which should be interesting, because there will be a couple of floating numbers as far as I can tell. Losses due to not having this rig online, obviously the spill, hurricane season coming up, and Diamond, I believe the 2nd biggest rig owner has suspended dividends and is hoarding cash in hopes that little guys will be pushed out of the gulf due to new regulations and cost of doing business there. If they're buying, I'm wondering what RIG will do.

I figured this looked like a good buy, as SF ace pointed out (who then went suddenly quiet!) but I picked up a large position here. I told my wife later I had picked it up and she said what do they do? I said they have offshore rigs, like the one that blew up in the gulf. "Oh ok, but not THAT company, right?" :)

This can't miss property was bought at the courthouse steps for $406,100 by Alvernaz Partners LLC (on June 10, according to PS). Still listed for $499k with 53 days on the market.
PS - OTF beat you with his BP play.