Sue Goodridge

Since the BDTI (Baltic Dirty Tanker Index) has fallen by 50% from the beginning of the year, crude tanker stock prices have also fallen.

In October, NAP amended its existing management agreement with Navios Tankers Management. It extended the fleet’s fixed-fee period for commercial and technical management services.

August was the first time in 22 months that China has recorded a YoY increase in imports. Crude oil imports for China are now at a record high.

In Week 28, analysts made no target price revisions or recommendation changes for crude tanker companies.

Refinery margins have fallen throughout most of the world. US Gulf refinery margins for WTI crude lost more than $2 compared to last month’s level.

VLCC time charter rates were almost constant in week ten of 2016. Otherwise, there hasn’t been a significant move in time charter rates in last few weeks.

Noble Corporation’s (NE) contract drilling revenue was $354.0 million in 1Q17 compared to $591.0 million in the same period last year.

Offshore drilling (XLE) (IYE) is a capital-intensive industry requiring a large amount of money to keep rigs active and well-maintained.

DHT Holdings (DHT) was the best-performing stock among peers on a YTD basis.

GasLog Partners plans to release its 2Q17 results before the market opens on July 27. The release will be followed by a conference call on the same day.

In many ways, China is the most important country for the crude oil tanker industry. In this series, we’ll take a close look at China’s March 2017 import-export data and manufacturing sector performance.

US products supplied for the week ended March 17, 2017, totaled 19,225 Mbpd (thousand barrels per day), 1% less than in the previous week.

Tsakos Energy Navigation’s 1Q16 net revenues fell by 11.6% to $99 million from $112 million in the previous quarter.

The consensus 12-month target price for Navios Maritime Partners is $4.83, which implies a potential upside of 40.82% from its market price on July 12.

Nordic American Tankers’ revenue in 3Q16 fell to $71 million—compared to $88 million in 2Q16. Its revenue was 29% lower than its revenue in 3Q15.

Consensus recommendations On January 13, 2017, Credit Suisse downgraded Navios Maritime Midstream Partners (NAP) to “neutral” from “outperform” and decreased the target price to $12 from $13. Only five analysts give recommendations on Navios Maritime Partners. According to Reuters, the consensus rating for the stock is 2.6, which means a “hold.” One analyst has given a […]

The third quarter wasn’t very good for tanker rates. In August 2016, the middle of the third quarter, tanker rates dropped to some of their lowest levels.

Euronav thinks that the rise in the orderbook is partly due to the Tier 3 legislation on nitrogen oxide emissions. The legislation is applicable from January 2016.

The time charter rates for one year on VLCCs (very large crude carriers) fell to $43,000 per day on November 25—compared to $45,500 per day the previous week.

The offshore drilling industry made headlines last week, especially Seadrill (SDRL), which reached a 52-week high of $0.73.

According to Weber’s report, VLCC rates for the route from the Arabian Gulf to China fell from $10,809 per day on August 18 to $8,747 per day on August 25.

Tsakos operates a total fleet of 50 tankers and has 15 tankers under construction. Of these 15, seven newbuilds are expected to join the fleet in 2016.

In May, no drilling permits were issued in the shallow waters of the Gulf of Mexico. In the first five months of 2018, only two were issued.

The Market has given a consensus rating of “sell” to Transocean (RIG). Of the 37 analysts covering the stock, only 5% have given it a “buy” recommendation.

Noble (NE) has a consensus “hold” recommendation based on ratings from 39 analysts covering the stock, according to Bloomberg.

In February 2018, China’s manufacturing PMI (purchasing managers’ index) was 50.3.

China’s crude oil imports hit an all-time high in March. April’s crude oil imports eased—total crude oil imports came in at 34.39 million tons.

China’s crude oil imports in March hit a new record. Its total crude oil imports came in at 39.0 million tons, compared to 31.8 million tons in February.

In week 12 of 2018, which ended on March 23, the BDTI rose from 635 to 656. In week 11, the index dropped by 18 points.

Noble Corporation plans to release its 2Q17 results on August 3, 2017, after the markets close. It will have a conference call on August 4, 2017.

Crude oil production has gradually fallen since the beginning of 2016, especially on the non-OPEC (Organization of the Petroleum Exporting Countries) side.

The main factor for a bright outlook for the tanker industry is the world oil supply, which is at the highest level ever at 97 million barrels per day. The low price for oil is supporting higher demand.

Diamond Offshore Drilling’s (DO) stock showed a 5% rise as of November 5, 2015, after the company released its 3Q15 earnings on November 2.

For the next five years, Noble needs to pay around $200 million–$300 million in debt every year. Then, the repayment for each year rises to around $400 million or more.

Teekay LNG Partners (TGP) has a total fleet of 87 vessels, out of which 27 vessels are newbuilds under construction. The active fleet of 60 vessels consists of 29 LNG carriers, 21 LPG carriers, and eight conventional tankers.

On September 30, 2016, Euronav (EURN) had long-term debt of ~$1.0 billion. This increased from $952 million at the start of the year.

GasLog Partners (GLOP) plans to release its 1Q18 results before the market opens on April 27.

In June 2017, Morgan Stanley upgraded GasLog (GLOG) to “overweight” from “equal weight.”

Week 51 was a mixed bag for crude oil tanker investors. DHT Holdings (DHT) was the top performer, and Nordic American Tankers (NAT) and Frontline (FRO) were the worst.

Tsako posted revenue of $109 million in 3Q16—9% lower than last quarter’s revenue of $120 million and 23% lower than $141 million recorded in 3Q15.

Offshore drilling stocks had mixed returns in Week 30, which ended July 27. The best performer was Seadrill (SDRL).

Most offshore drilling stocks traded in the green in the week ended July 13. The best performer during the week was Noble.

In week 44, many of the crude tanker stocks traded in the red. Only Frontline and Navios Maritime Midstream Partners traded in the green.

The BDTI stood at 739 on June 7, 2016. For the week ending June 3 (Week 22), the BDTI rose to 759 from 735 at the beginning of the week.

China’s (MCHI) auto sales for the first two months of 2017 were 8.8% higher than sales for the same period in 2016.

Of the 32 analysts covering Ensco (ESV), 44% recommend a “buy” or equivalent for the stock.

In the first quarter, Teekay Tankers’ EBITDA fell to $80.9 million, from $83.9 million in the previous quarter.

Newbuild VLCC (very large crude carrier) prices rose in May 2017, and this is the first time we’ve seen a rise in prices this year.

In 4Q17, Transocean’s (RIG) costs increased. With a fall in revenue, Transocean’s drilling-to-revenue ratio rose to 66% in 4Q17 from 46% in 3Q17.

Gener8 Maritime Partners’ YTD returns were -10% as of April 5, 2018. Gener8 Maritime Partners is the fourth-best performer among its peers YTD.

Seadrill and Diamond Offshore have more than 20 floaters in their fleets. Ensco and Rowan Companies have more jack-ups in their fleets than peers have.

After a steep dip to a four-month low in January, crude oil imports in February jumped, which was a good sign for crude tanker investors.

The marine oil spill in April 2010 was the worst environmental disaster in US history, causing millions of barrels of oil gushed into the Gulf.

In September 2015, Euronav distributed an interim dividend of $0.62 per share. Euronav has stated that it is committed to distributing 80% of net income.

In the week ending September 29, 2017, almost all of the offshore drilling stocks traded in the green.

According to Reuters, the consensus rating for Höegh LNG Partners (HMLP) is 1.38, which means a “strong buy.”

The offshore drilling industry experienced many events in the first half of September 2017. Seadrill (SDRL) filed for Chapter 11 bankruptcy.

Week 44 ended on November 4, 2016. The BDTI (Baltic Dirty Tanker Index) rose from 660 to 665 at the beginning of the week.

Of the 38 analysts covering Transocean, 5% have given it a “buy” recommendation, while 32% have given it a “hold,” and 63% have recommended a “sell.”

Offshore drilling companies are capital-intensive and have varying degrees of financial leverage. Thus, we use the EV-to-EBITDA multiple as a valuation.

In May 2017, the Markit China Manufacturing PMI was 51.2 (MCHI)—similar to the previous month.

Pacific Drilling’s shareholders approved a one-for-ten reverse stock split of the company’s common shares.

Most of the crude tanker stocks rose in week 21. Euronav and DHT Holdings were the best performers in the sector.

In week 16, the BDTI was higher than the previous year’s level. On average, the index was 4% higher than the same period last year.

Teekay’s acquisitions complement the company’s ship-to-ship transfer business and expand its presence in the US Gulf of Mexico.

In 4Q17, Ensco’s EBITDA fell to $98.4 million from $149.5 million in 3Q17. The company’s EBITDA was 48% lower than its 4Q16 EBITDA of $190.0 million.

In week 14, the BDTI (Baltic Dirty Tanker Index) fell from 790 to 775. The BDTI tracks shipping rates for crude oil tankers on representative routes.

As of July 25, 2017, Transocean (RIG) had a backlog of $10.2 billion—compared to $10.8 billion in April 2017.

Teekay LNG Partners (TGP) was the best-performing stock in 2017 among the LNG carrier companies. TGP reported a year-to-date return of 36.6% on December 20, 2017.

Crude tanker stocks have given mixed returns in 2017. Gener8 Maritime has been the best performer YTD, while Nordic American has been the worst.

Oil is one of the most important and most frequently traded commodities, and offshore drilling is an integral part of the oil industry.

Even after week 21’s fall in stock price, Seadrill still has a whopping 82.8% year-to-date return as of May 25.

In 1Q16, Transocean (RIG) had cash flow from operations of $631 million, which was lower than the $960 million it had in 4Q15.

Transocean’s drilling revenue for 1Q16 was $1.34 billion, ~28% lower than the $1.85 billion in 4Q15 and 34% lower than the $2 billion in revenue in 1Q15.

Tsakos Energy Navigation’s vessel operating expenses decreased to $33 million in 4Q15 compared to $38 million in 4Q14. The firm sold two vessels in 3Q15.

Of the 34 analysts covering Transocean, 44% recommend a “buy” or some equivalent for the stock, while 32% recommend a “hold.”

The bargaining power of offshore drilling customers is influenced by oil prices and utilization rates. When oil prices are high, rig capacity goes down.

DHT Holdings’ (DHT) YTD returns were 1.1% as of April 5, 2018. DHT Holdings is the only crude tanker company with a positive YTD return.

After a spectacular 2015, the crude tanker industry is going through a rough patch in 2016. All crude tanker stocks have given negative year-to-date returns.

After outstanding auto sales in January, China’s auto sales took a dive in February. In February, the total sales recorded came in at 1.6 million, which was down 0.86% YoY (year-over-year) and down 36% from the previous month.

Even though industry tanker rates were strong compared to 1Q15, the company recorded negative growth of -7% in 2Q15 compared to 1Q15.

In August 2017, China’s auto sales rose 4.1% YoY (year-over-year). Its total vehicle sales rose 5.3% to 2.19 million in August.

In this article, we’ll look at Golar’s prospects and progress with regards to its FSRU (floating storage and regasification unit) business stream.

Majority recommends “sell” Currently, 28 analysts give recommendations on Seadrill (SDRL). Of these, none have given a “buy” recommendation on the stock. Six analysts have given a “hold” recommendation, and 22 have a “sell” recommendation. The consensus target price is $1.78, which implies a downside of 17%. Like Seadrill, Ocean Rig (ORIG) does not have […]

Euronav’s (EURN) CEO, Paddy Rogers, discussed his thoughts on the outlook for the tanker industry at a recent shipping conference.

In week 9 of 2018, which ended on March 2, the BDTI rose from 646 to 669. In week 8, the index fell by three points.

Tsakos Energy Navigation’s (TNP) YTD returns were -12.8% as of April 5, 2018. Tsakos Energy Navigation is the fifth-best performer among its peers YTD.

Article focus In this article, we’ll discuss analysts’ target price revisions for offshore drilling companies in Week 8 of 2018 (ended February 23). Revisions in Week 8 Jefferies revised its target prices for two offshore drillers. On February 21, 2018, it reduced the target price for Transocean (RIG) to $12 from 413 and maintained a […]

China’s (FXI) auto sales rose to ~2.9 million in November 2016 from ~2.7 million in October.

Older vessels are less fuel efficient and are costly to maintain. Insurance rates also increase with a rig’s age, increasing operating costs.

At the onset of 4Q15, tanker rates started to climb as refineries completed their maintenance programs. The rate spike was especially lead by VLCCs.

In the first week of 2017, the number of VLCCs (very large crude carriers) in the world was 686. Halfway into 2017, the VLCC fleet has grown to 713.

Analysts expect a fall in Rowan Companies’ (RDC) EBITDA (earnings before interest, tax, depreciation, and amortization).

On August 22, Seadrill reported that it received a contract termination notice for its contract with Pemex Exploration Servicios on the rig West Pegasus.

The day after Euronav (EURN) announced its 3Q16 results on October 31, it announced that its agreed to purchase the 50% of the joint venture it does not own in the VLCC VK Eddie.

Ensco (ESV) released its quarterly fleet status report on July 19. Ensco 8503 secured a 100-day contract with Talos Energy in the US Gulf of Mexico.

In week 39, the week ending September 29, the BDTI rose to 776 from 772. In week 38, the index rose by 28 points. It rose for the fifth consecutive week.

GasLog, GasLog Partners’ general partner (or GP), has entered into a seven-year time charter contract with Total, which will commence in mid-2018.

On a year-to-date basis, GasLog Partners (GLOP) was the top-performing stock among the LNG carrier companies.

VLCC rates (very large crude carrier) for the benchmark route Gulf to Japan rose from $49,400 per day last month to $112,100 per day for the week ending October 2, 2015.