Aug 14, 2024 Updated
Henrik Alex
Investing Group Leader
Tidewater: Decent Quarter But Lowered Outlook
Disappoints
- Leading offshore service vessel provider Tidewater Inc. reported strong Q2/2024 results, with both top and bottom line results exceeding expectations.
- Revenues of $339.2 million and Adjusted EBITDA of $139.7 million represented new multi-year highs. The company's average dayrate of $21,130 moved up by 32% year-over-year and 8% sequentially.
- Despite the company's strong second quarter results, management lowered full-year expectations due to several drilling campaigns having been pushed out from the third into the fourth quarter.
- In addition, a combination of higher-than-anticipated dry-docking days and required vessel repositioning will impact Q3 results.
- Considering limited upside from current levels and with Tidewater screening expensive relative to other offshore oil and gas service stocks, I am reiterating my “Hold” rating on the shares.
油價決定TDW在2023的表現
彭博資訊能源專欄作家費克林（David Fickling）撰文指出
石油輸出國組織與夥伴國（OPEC+）上周日（4日）的部長會議結束後，沙烏地阿拉伯決定自行將日產量減少100萬桶；沙國能源部長阿布都阿濟茲並表示，「我們將採取一切必要作法，以穩定石油市場」。
在1980年代初期第二次石油危機過後，沙國要達成穩定油價的目標極為困難。一方面歐洲大量投資本身的石油業，北海油田開始運轉。從1979~1985年間，單單是英國的石油日產量便增加逾100萬桶，前蘇聯產油量同樣激增。
另一方面，石油需求則相當疲軟。1973年第一次石油危機之後，消費國便開始積極尋找替代能源。1970年代初期全球25%的電力依賴燃油，但很快就降到5％以下，而且之後從未回升過。歐洲與蘇聯石油消費量也陷入停滯。美國則大幅提高利率以壓制通膨，也進一步抑制石油需求。
如此一來，沙國要使油市保持平衡，就只能減產、再減產。沙國也因而付出重大代價，到1985年時沙烏地阿拉
柏幾乎將全球最大石油輸出國寶座拱手讓給蘇聯，沙國貨幣里亞爾也大幅貶值。
當前情況與當時極其類似。俄羅斯無所顧忌地增加石油出口，美國升息抑制全球經濟，中國大陸經濟復甦正在洩氣，而替代能源科技開始壓縮石油需求。今年全球賣出的新車中，約五分之一是電動車，而中國大陸及歐洲的電動車銷售比率更分別達到三分之一及四分之一。沙國試圖掌控油市將難以奏效。沙國從4月起日產量減少150萬桶，需要油價比目前的價位高出14%來彌補收入
In 2022, U.S. crude oil exports increased to a new record, 3.6 million barrels a day
美國原油出口達到每日3.6 百萬桶
U.S. petroleum product exports set a record high in 2022
每天生產5.96百萬桶指的是 oil produts 石油類製品, 跟上面的原油出口應該不一樣
OPEC’s role in the world’s oil industry
OPEC’s global crude oil production share is approximately 38 percent and it also accounts for 16 percent of the world’s natural gas production. Moreover, OPEC owns roughly four-fifths of global crude oil reserves. Given the high dependence of the world economy on oil and gas, OPEC’s influence on the world market is evident. In April 2023, OPEC and 10 additional oil producing countries that are collectively known as OPEC+ released a surprise announcement that it would collectively cut crude oil output by some 1.16 million barrels of oil per day from May through December 2023, after output was already cut by two million barrels daily in October 2022.
剛剛提到2022年美國每日原油出口達到3.6百萬桶, 這邊有趣的是, 2022年10月 ~2023年4月, OPEC先後減產每日2百萬和1.16百萬原油( 2 + 1.16 = 3.16), 數字加總每日減產3.16百萬, 恰巧抵銷掉美國新增3.6百萬桶原油出口
The
planned oil output decrease immediately led to a five percent increase in crude
oil prices, and is expected to increase oil prices by as much as 10 U.S. dollars
per barrel overall, according to some analysts.
In 2021, daily oil production in OPEC countries stood at
some 31.7 million barrels.
OPEC石油組織每日生產量在31.7百萬桶
Saudi Arabia is by far the largest crude oil producer and also leading the list of global oil exports of OPEC countries. In 2021, about 6.2 million barrels were exported from Saudi Arabia per day. That was nearly one-third of the total OPEC crude oil exports that year. OPEC’s net oil export revenue, excluding Iran, was 570 billion U.S. dollars in 2021. 這邊提到沙烏地阿拉伯聯合公國原油出口達到6.2百萬桶, 佔比將近OPEC
1/3原油出口量, 以此估算OPEC每日原油出口至少在18百萬桶
How the West’s price cap on Russian oil
could roil energy markets
Traders expect a damp squib; they could get
dynamite instead
Dec 2022 Economists
Ever since Russia invaded Ukraine in February, America’s energy policy has pursued two grand, seemingly contradictory aims. The first is to keep global oil supply high enough that prices remain tolerable and public support for sanctions stays strong. The second is to asphyxiate 掐住脖子 Vladimir Putin’s war machine by stemming 控制the flow of dollars Russia earns by flogging 懲罰打擊 oil barrels. Together they form a circle that is hard to square because, with supply closely tracking demand amid a dearth of new production, taking any oil off the market mechanically triggers higher prices. The West has nevertheless tried to defy抗拒 the law of physics by crafting手工製作a growing array of measures to meddle干擾 in oil markets.
The ones that have been deployed until now
have often been piecemeal and involve uncomfortable compromises. Puncturing its
own sanctions against Venezuela’s thuggish regime, on November 26th America
granted permission for Chevron, a big American oil firm, to crank up its
production there. America has also released huge volumes from its strategic
crude-oil stocks; the reserve is now at its lowest level since 1984. The White House’s
least productive effort has aimed to cajole Gulf states into pumping more.
Within months of President Joe Biden fist-bumping Muhammad Bin Salman, the de
facto Saudi ruler, in Riyadh in July, the petrostate and its allies in the
Organisation of the Petroleum Exporting Countries (opec) declared they would
cut output instead. On December 4th the cartel meets again. It looks unlikely
to help by increasing output now.
Yet the West’s most carefully constructed
campaign to outsmart Mr Putin has yet to come into action. In June the eu
announced that, come December 5th, it would ban imports of Russian seaborne
crude oil, which accounted for 2m barrels per day (b/d), or about 40% of
Russia’s total crude exports, a year ago. Then it said it would also bar European
providers of maritime services, tankers and insurance from helping non-eu
buyers get hold of the Russian barrels it shuns—a powerful tool, given those
firms dominate the global shipping market. It soon dawned on America that,
together, those two measures had the potential to squeeze global oil supply.
And so it insisted on introducing a weakening clause: provided they agree to
pay a maximum price, set by the g7, for Russia’s oil, non-Western buyers could
continue to buy European insurance. 歐盟民主陣營抵制俄羅斯, 禁止原油歐洲海線運輸, 大概是2022Q4 SLB和TDW 開始大漲原因
As we went to press the level of this
“price cap” was still being debated among Europeans. Some, led by Poland and
the Baltic states, want the cap to be low so as to hurt Russia’s finances.
Others, worried about their shipping industries or retaliation from Russia, want
to keep it close to market levels. Rumours filtering out from the talks suggest
it may end up near $60 a barrel—a discount of nearly 30% to the current price
of Brent, the global benchmark, of $85 a barrel—which is about what Russia
sells its oil for these days anyway. Whatever the outcome one thing is certain.
Never before has such a fiddly複雜縝密set of measures hit the global oil market at
once. Many of these have been signalled for so long that they may cause few
problems. But there are reasons to think the boat could be rocked, at least for
a while.
In an optimistic scenario the package of
sanctions could manage to reconcile the West’s two contradictory aims. The
embargo would ensure Europe no longer fuels Mr Putin’s war: last month the bloc
still bought 2.4m b/d of crude and refined oil from Russia. Meanwhile the price
cap, says an American Treasury official, would act as a “release valve”,
keeping the global market in balance by letting developing countries buy
Russian oil at a discount. Russia would receive less money whether or not those
countries sign up to the plan, because the mere existence of a cap, or so
America reckons, would boost their bargaining power.
Embargo : An official ban on trade or other commercial activity with a particular country.
In the absence of a low enough price cap,
as is likely to be the case, the cost to Russia would be real but modest. It
would add yet more inconvenience to that created by the West’s broader arsenal
of sanctions, which may impair Russia’s economy in the long run but have hardly
proved terminal so far. The discounts borne by Russian grades over regional
benchmarks have widened in recent weeks but remain well below those seen in the
aftermath of the invasion. At least the embargo would not roil crude markets—or
so commodities markets suggest. Brent futures, which in June indicated a
year-ahead oil price approaching $100 a barrel, now place it closer to $85 (see
chart panel). Most traders expect an acceleration of the shift in fuel flows
seen so far this year, with India and China taking over from Europe as Russia’s
biggest customers.
brone : bear 過去分詞
This happy story assumes no logistical
hiccups打嗝 will prevent decades-old trading patterns from undergoing a smooth but
rapid transition. A less rosy scenario, however, could see sanctions throw
spanners in the spigots by introducing unwanted friction. Three bottlenecks
stand out: a crunch in tankers, an insurance gap and a global shortage in risk
appetite.
Start with the tankers. Cyprus, Greece and
Malta loom so large in shipping that Europe’s ban on the provision of maritime
services to countries that do not sign up to the cap—and many of them, loth to
endorse American interference in commodity markets, have signalled they
won’t—could create a big shortage of ships capable of carrying Russian crude.
Claudio Galimberti of Rystad Energy, a data firm, anticipates a shortfall of
some 70 vessels, with an aggregate carrying capacity of 750,000 b/d, lasting
two to three months.
Eventually this problem should work itself
out. Industry insiders point to an ever growing “dark fleet” that is absorbing
vessels from established sanction-busters in Iran and Venezuela. Russian firms
are bringing mothballed vessels back into service; eu shipowners are also transferring
assets to operators outside the g7. A top energy trader reckons that, by
February, there will be enough ships to transport Russian crude, though vessels
to redirect refined products such as diesel from short-haul routes in Europe to
distant new customers may stay scarce for some time.
The crunch in insurance coverage is a
bigger potential snag. It is not that Middle-Eastern or Asian countries keen on
Russian barrels do not have local firms with the financial muscle to insure
tankers and cargo. What they may soon lack is cover for much bigger risks like
oil spills, liabilities for which can easily reach half a billion dollars. Few
insurers new to the market will look forward to becoming liable for an ageing
Venezuelan vessel going through Danish straits a mere 15m deep, says a veteran
oil trader, without a big backstop.
The problem is that this sort of
backstop—reinsurance—demands deep pools of private capital hard to find outside
the West. Perhaps the Chinese and Indian governments could be persuaded to
offer sovereign reinsurance, though market insiders doubt they have the
stomach. In fact some traders reckon Asian buyers could buy less Russian oil
rather than more as the insurance ban comes into force.
The third bottleneck could be a lack of
appetite outside the g7 for the perceived risks of circumventing a scheme
designed by the West. Many do not believe American promises to remain hands-off
if countries choose to go around the cap. It does not help that, in its most
recent sanction campaigns, such as those targeted at Iran, America has
studiously kept the perimeter and degree of enforcement of penalties vague so
as to deter anyone from dealing with its foes. The practice, known in sanctions
parlance as “constructive ambiguity”, is hard to roll back.
All this could cause a chunk of Russian oil
exports to fall off the map, prompting prices to jump. But a much worse
scenario, where Russia voluntarily slashes its oil exports and prices get out
of control, is also possible. It may happen if China, having to forsake its
purchases from other countries to buy yet more Russian oil, tries to drive too
hard a bargain. More likely it would be a unilateral decision by Mr Putin. It
could incur huge costs: Russia derives 40% of its export revenues from oil
sales. But that might be worth bearing temporarily if it drives global prices
up, hurting the West and giving Russia more leverage in negotiations with
buyers, without inflicting intolerable damage to wells. The country’s decision
to shut temporarily nearly 2m b/d of crude production during the pandemic
resulted in only a 300,000 b/d loss in long-term capacity, according to Energy
Intelligence, an industry publisher.
Up to now the g7’s energy policy has been
hashed out in painstaking detail in Washington, dc, and Brussels. But, to
paraphrase Mike Tyson, everyone has a great plan until they get punched in the
face—and, facing serious setbacks on the battlefield, Mr Putin is pulling no
punches right now. The price-cap’s first contact with reality could be rough.
https://seekingalpha.com/article/4426899-tidewater-inc-tdw-ceo-quintin-kneen-on-q1-2021-results-earnings-call-transcript
Some of these risks and uncertainties include, without limitation, the risks related to fluctuations in worldwide energy demand and oil and natural gas prices, and continuing depressed levels of oil and natural gas prices without a clear indication of if, or when, prices will recover to a level to support renewed offshore exploration activities; fleet additions by competitors and industry overcapacity; our limited capital resources available to replenish our asset base as needed, including through acquisitions or vessel construction, and to fund our capital expenditure needs; uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable term
Our revenues, net earnings and cash flows from operations are largely dependent upon the activity level of our offshore marine vessel fleet. As is the case with the numerous other vessel operators in our industry, our business activity is largely dependent on the level of exploration, field development and production activity of our customers. Our customers’ business activity, in turn, is dependent on current and expected crude oil and natural gas prices
The first quarter is often a relatively quiet quarter. This first quarter was relatively quiet. The first quarter is the softest calendar quarter of the year, but I was pleased with the cash generation in the quarter. You may recall from last quarter that the P&L performance was much stronger than we anticipated, but the cash flow generation lagged behind. As often is the case, cash flows caught up to those earnings in the first quarter.
Cash flow from operations for the quarter was $5.7 million. Free cash flow was $19.2 million bolstered by working capital inflows and proceeds from vessel sales.
Free cash flow for the trailing 12 months was $87.1 million. That includes $39.8 million of asset sales, which we anticipate winding down over the next 12 months. Quarterly revenue was slightly higher than what we expected, but operating costs were also slightly higher.
We used the cash generated in the quarter to pay off $26.4 million of outstanding debt. Net debt is down to $23.1 million
We sold six vessels in the quarter for $11 million. We sold two more subsequent to the quarter, and we have 18 vessels left in the assets held for sale category. Based on the recovery in the market that we see beginning to unfold in the second half of 2021, I don't anticipate reducing the vessel fleet any further than what we currently have in assets held for sale. After this lot is sold, I anticipate everything we own should be working by the end of 2022.
I am very much looking forward to getting out of the layup vessel business because that certainly have cost us $5.4 million in the first quarter. Annualized, that's $21.6 million of cost per year that we can add to the bottom line by getting all of these vessels out of layup. And in addition, there will be the operating profit from these currently idle vessels.
Our G&A costs continue to come down. That's now 9 consecutive quarters of G&A run rate cost reductions. Our annualized G&A expense for the first quarter was $64 million, down another $4 million from the last quarter. I mentioned G&A because I actually anticipate it will begin to rise a bit as we go through the remainder of 2021. I think I've said that on the last few quarterly calls, and it keeps going down.
But we have to go to fill some open positions, and I anticipate travel expenses coming back as we get into the latter half of '21. Quite frankly, it's going down now just based on culture and momentum of earlier cost-saving initiatives.
Our big cost focus in 2021 is optimizing the cost of drydocks and minimizing the cost of vessels in layup, the $21.6 million figure I mentioned a moment ago. I still anticipate drydocks for 2021 to be approximately $20 million. The second quarter is the heavy drydock quarter this year. We anticipate approximately $9 million of drydock spend in the second quarter.
In our first reassessment of the recovery in the market after the pandemic broke out, it was on this call, the first quarter call last year. At that time, I indicated we thought business would be down 25% and that it would take 18 months for the industry to rebalance. Business was down 28% year-over-year, and I now anticipate it will be the first quarter of 2022 before we get back to where we were from a supply-and-demand perspective in the first quarter of 2020, essentially putting us back 2 years. The worst, of course, is definitely behind us. Pandemic-driven inefficiencies, which we estimate cost us 5% of revenue, are still impacting us.
That's factored into our full year margin guidance of 30%
Each wave of the pandemic has created different challenges, although they can all be generalized as increased costs associated with moving people around the world. The latest challenge results from the fact that approximately 8% of our mariners come from India, which is currently experiencing the most devastating impacts of the pandemic.
Earlier in the pandemic, it was impacting the Philippines, another key source of quality mariners, about 26% of our mariners come from the Philippines. We continue to respond to the circumstances presented, but that 5% of revenue costs look to be with us for the remainder of 202
As we look at the first quarter of 2021, we still face strong headwinds in the market going into the year in all regions. As Quintin has just mentioned, Q1 has always tended to be a relatively quiet quarter. But on a global basis, active utilization across the whole fleet was only down 1% at 78% compared to the first quarter of 2020. For the deepwater fleet specifically, we continue to see a rise in active utilization of 6% compared to the first quarter of 2020.
Average rates while slightly down from $10,267 per day in Q1 2020 was still a leading industry average of 900 -- $9,993 per day in Q1 2021. Globally, we had 1 more average active vessel working in the first quarter of 2021 than in the fourth quarter of 2020. And the average stacked fleet continued to reduce to 54 vessels in quarter 1 compared to 60 vessels in Q4 2020, a trend that we expect to continue throughout the year.
Our Middle East, Asia Pacific region continued to see solid demand relative to the rest of the world with total utilization and average day rates both up from the first quarter 2020. Active utilization for the quarter jumped to 84% compared to 78% in Q1 2020. Our average rates in the region also increased to $8,506 per day compared to $7,863 per day in Q1 2020. Vessel revenue for the quarter was down $400,000 compared to Q1 2020. Going forward, we still expect to see a pickup in demand going into Q2 and Q3 of this yea
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