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Hornbeck Offshore Services: Too Many Problems Will Drag The Stock Further Down – Seeking Alpha

Posted: February 22, 2017 at 4:34 am

Hornbeck Offshore (NYSE:HOS) shares tanked following the company’s recent quarterly report. The numbers themselves were not surprising given the horrible market environment – the company reported a net loss of $0.53 per share on revenues of $41.9 million.

To get a quick picture of how bad things are, revenues declined by 52.8% since the fourth quarter of 2015 and by 19.3% since the third quarter of 2016. As a result of poor market conditions, the company had to stack 25 more vessels.

As I stated above, the results themselves are not a surprise at all. Perhaps, seeing actual numbers was a pain for Hornbeck Offshore investors, and this partially caused the post-earnings sell-off.

Also, the stock was elevated after the post-OPEC deal rally, although the deal changed nothing yet for the offshore drilling industry as was highlighted many times during this earnings season (read here, here and here).

However, the most important factor for any company is the outlook, and the outlook presented by Hornbeck Offshore management was just horrific.

Here’s what Hornbeck Offshore had to say:

“We project that even with the current depressed operating levels, cash generated from operations, together with cash on hand, should be sufficient to fund our operations and commitments at least through to our current guidance period ending December 31, 2018.

However, absent improved market conditions, we do not currently expect to have sufficient liquidity to repay our three tranches of funded unsecured debt outstanding that mature in fiscal years 2019, 2020 and 2021, respectively, as they come due, unless such debt is refinanced or restructured.

Refinancing in the current climate may not be achievable on terms that are in line with our historic cost of debt capital. We are fully aware of the challenges of current market conditions are presenting to all offshore oil and gas industry and continue to actively review our capital structure and assess our strategic options, as we consider plans to ensure the long-term viability of Hornbeck Offshore”.

In the previous report, the company warned investors that it was going to assess strategic options, but the language was softer. Now Hornbeck Offshore presented the big picture to investors – the company will have no money to pay debt in 2019 and will have to restructure its debt.

I would like to highlight that it does not even matter for Hornbeck Offshore if the industry rebounds by 2019 or not. The rationale for this statement is that Hornbeck Offshore management believes that it will be necessary to address the capital structure long before 2019. As always, concessions from lenders mean big concessions from shareholders.

Judging by Hornbeck Offshore comments, the company will try to push maturities as far as possible as it does not see any recovery coming soon:

“Earlier in this cycle, the industry mantra was lower for longer. The message we have recently been hearing from our customers, almost uniformly, is that they now see oil prices as lower forever. They no longer view this as a U-shape recovery, but an L-shaped recovery, or so we’re told []

Our customers are telling us, they’re not going to FID or sanction projects in deepwater. I mean, this is what they’re telling us, $40 a barrel. They’re going to have to justify $40 a barrel, not $50, but $40″.

Here’s what we see from this and what the market has so far failed to appreciate in both OSV and OSD stocks.

No matter what the current oil price is, the breakeven bar for projects is set low because oil producers don’t want to be trapped in capital-intensive endeavors if oil goes below $50.

Once again, I remind that it does not matter now if they are right or wrong in their evaluation, because they will act upon their views and this means little demand for OSD and OSV industries.

The year 2017 is going to be bad for the industry and for Hornbeck Offshore. The company will likely see its revolving credit line go from $200 million to $75 million as it plans to elect interest coverage holiday at some point during this year.

There is no cash crunch as the company had $217 million at the end of 2016, but this number will trend down as the year progresses.

The deal with creditors won’t be easy to reach as highlighted by the problems of Hornbeck Offshore’s peer, Tidewater (NYSE:TDW).

Tidewater’s shareholders are already on the verge of a wipeout. The situation for Hornbeck Offshore shareholders is better, as the company did not ran into any covenant and does not depend on lenders’ good will.

Anyway, proactive attempts to deal with debt mean nothing good for shareholders unless the company can suddenly gain access to capital markets.

At the end of 2016 – beginning of 2017, a group of offshore drillers, namely Transocean (NYSE:RIG), Rowan (NYSE:RDC), Noble Corp. (NYSE:NE), Ensco (NYSE:ESV) and Atwood Oceanics (NYSE:ATW) were able to raise money through debt and equity.

The window of opportunity was opened by the OPEC/non-OPEC deal, but I believe that it has already shut down as no tangible evidence of any improvements on the offshore drilling front materialized after the deal.

Also, players with financial problems like Seadrill (NYSE:SDRL) or Ocean Rig (NASDAQ:ORIG) were not able to raise money during this fortunate period. Yes, Seadrill is in restructuring negotiations right now, but even its founder is not willing to inject money via equity. So, for weaker industry players like Hornbeck Offshore or Tidewater the market was never really opened.

All in all, Hornbeck Offshore still has time to review its strategic options and I expect that the company will not hurry.

Any negotiations with creditors will take long as evidenced by Tidewater and Seadrill restructuring negotiations. Given the uncertainty, the stock will be highly volatile and present trading opportunities on both long and short sides.

However, the general direction will be to the downside as the OSV industry is the last one in the supply chain to benefit from rising oil prices, and current oil prices are not sufficient enough to bail out the OSD industry, the client of the OSV industry.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in HOS over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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New virtual reality lounge opening in the Capital Region – NEWS10 ABC

Posted: at 4:15 am

New virtual reality lounge opening in the Capital Region
CLIFTON PARK, N.Y. (NEWS10) For millions around the world gaming is a way of life, and a virtual reality lounge in Clifton Park is bringing that experience to a level of immersion never seen before. Toxic VR, a virtual reality lounge opening right

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IXE Bahamas Bank Bid Crashes – finews.com

Posted: February 17, 2017 at 1:41 am

Jesus Alejandro Garcia Alvarez

A brash self-styled Mexican entrepreneur’s bid to crack into Swiss banking is at an end. His second attempt to buy a financial firm has failed in a hugely awkward way.

Aborted, Banque Cramer & Cie headlined in an unusually unvarnished statement released overnight. The Swiss bank said it won’t be selling a Bahamas subsidiary to IXE Capital, as planned, after all.

IXE is controlled by Jesus Alejandro Garcia Alvarez, who claims to be a businessman and wealthy landowner from Mexico. Recently, questions over Garcia Alvarez’s wealth, his dealings, and his business plans have been raised by several media outlets.

Flash Crash Millions

For example, Garcia Alvarez was close to buying Ticino-based Bank Arner, but the deal fell apart last year, reportedly because he was unable tocapitalize the bank.

He also plays a prominent role in the disappearance of millions from the $50 million fortune of the so-called Flash Crash trader.

Now, Garcia Alvarez and IXE have run aground with their latest venture as well: buying the Bahamas subsidiary of Swiss private bank Cramer.

Lost Credibility

The Geneva-based firm said the deal fell apart because IXE didn’t pay up.

While Banque Cramer & Cie fulfilled all of its contractual obligations, IXE Capital Bahamas failed to pay the agreed consideration on theclosing date. Cramer’s parent firm said in a statement.

IXE Capital Bahamas is therefore in breach of agreement.

The subsidiary will remain as an independently-managed part of Cramer, the bank said.

Embarrassing Echoes

In the fallout of the failed Cramer deal, Garcia Alvarez will have spent any shred of credibility he still had in Swiss banking after the Arner episode, where he left potential partners like renownedSwiss banker Michael Baer in the lurch.

The collapse of the Cramer deal suggests that Garcia Alvarez is no longer as solvent as he once claimed to be. The failure of the deal, entirely preventable, has embarrassing echoes of Arner.

There, Garcia Alvarez reportedly tried to pass off unstamped gold to Switzerland’s regulator as bank capitalization which Finma didn’t accept.

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One Simple Thing Reg CF Issuers Can Do To Raise More Money Crowdfunding – Crowdfund Insider

Posted: February 6, 2017 at 3:29 pm

Since Reg CF became effective, Ive noticed a disturbing pattern in Reg CF dealstheir valuations and economic terms are oftentimes unjustified. Unlike a normal angel or VC investment, which includes back and forth negotiations on terms with a lead investor, Reg CF issuers largely set their own economic terms. For the crowd, its a take-it-or-leave-it situation, and I suspect that many other CF investors (myself included on a number of deals) end up leaving it.

You see, some CF issuers, upon learning that they get to set the terms, think This is great! Let me take advantage of this and set a valuation much higher than I might normally get! And as a result, we the crowd end up seeing a bunch of unrealistically priced deals. Were turned off. We dont invest.

If issuers set fair and realistic economic terms, they will be able to raise more capital. If they act self-serving and demand unfair and unrealistic economic terms, the crowds likelihood of investment drastically diminishes, and the issuer may end up not only with less capital, but possibly with no capital at all (to the extent they fail to meet the minimum and arent able to close the round).

This is not a new concept. I often get clients in the real estate syndication space where there also is little to no negotiation on terms. Experienced syndicators and investors in the space know what standard terms are. While beginner syndicators sometimes have to offer more than the industry standard, in order to get started and build a track record, experienced syndicators sometimes can command less than standardto the extent they have a proven track record and a strong relationship with their repeat investor base. Sometimes, beginner syndicators will try to push for more self-serving terms, despite the lack of a track record or strong relationshipswhich results in their not being able to raise enough capital to close the deal. (The second time around, theyll follow the standard, with more success).

Reg CF offerings are very similar. There are a plethora of deals, and as an investor, Id rather wait for a good deal than invest in a bad one.

Moreover, assigning an inflated valuation to a company demonstrates short-term thinking. Explains Peter Goldstein, Managing Member of Alchemy Capital Group;

Valuation is a sensitive item that goes way beyond the initial crowdfunding campaign. I think it is critical that an early stage company look at the capital structure and valuation for the long term. The amount of capital needed to meet its short term, mid and long term goals needs to be considered to prevent a down round and future limitations for funding or trading on the capital markets.

As a mentor once said, theres no such thing as a bad deal, theres only bad pricing. (Admittedly that maxim holds more true for real estate than for operational companies, where there are bad deals).

I have no data or statistics to back up this theory, just personal experience, and observations as both an investor and counselor. Thats just my $0.02take it or leave it.

Amy Wan,Esq.CIPP/US, is aSenior Contributorto Crowdfund Insider. Amy is a Partner at Trowbridge Sidoti LLP (CrowdfundingLawyers.net) where she practices crowdfunding and syndication law. Formerly, she was General Counsel at Patch of Land, a real estate marketplace lending platform. While there, Amypioneered the industrysfirst payment dependent notethat is secured pursuant to an indenture trustee and designed to be bankruptcy remote, and advised the company on its Series A funding round. In recognition her work at Patch, she was named as a Finalist for theCorporate Counsel of the Year Award 2015by LA Business Journal. Amy also brings extensive experience in legal innovation and rethinking the delivery of legal services. She is the founder and co-organized of Legal Hackers LA, and was namedone of ten women to watch in legal technology by the American Bar Association Journal in 2014.

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List of the 14 Countries of Oceania by Area

Posted: December 22, 2016 at 1:14 pm

Australia is the largest country in the region of Oceania. Source: CIA World Factbook, 2007

By Amanda Briney

Oceania is a region of the South Pacific Ocean that consists of many different island groups. It covers an area of over 3.3 million square miles (8.5 million sq km). The island groups within Oceania are both countries and dependencies or territories of other foreign nations. There are 14 countries within Oceania and they range in size from the very large such as Australia (which is a both a continent and a country) to the very small like Nauru.

The following is a list of Oceania’s 14 different countries arranged by land area from the largest to the smallest. For reference, the capital city and 2011 estimated population has been included for each. All information in the list was obtained from the CIA World Factbook.

1) Australia Area: 2,988,901 square miles (7,741,220 sq km) Population: 21,766,711 Capital: Canberra

2) Papua New Guinea Area: 178,703 square miles (462,840 sq km) Population: 6,187,591 Capital: Port Moresby

3) New Zealand Area: 103,363 square miles (267,710 sq km) Population: 4,290,347 Capital: Wellington

4) Solomon Islands Area: 11,157 square miles (28,896 sq km) Population: 571,890 Capital: Honiara

5) Fiji Area: 7,055 square miles (18,274 sq km) Population: 883,125 Capital: Suva

6) Vanuatu Area: 4,706 square miles (12,189 sq km) Population: 224,564 Capital: Port-Villa

7) Samoa Area: 1,093 square miles (2,831 sq km) Population: 193,161 Capital: Apia

8) Kiribati Area: 313 square miles (811 sq km) Population: 100,743 Capital: Tarawa

9) Tonga Area: 288 square miles (747 sq km) Population: 105,916 Capital: Nuku’alofa

10) Federated States of Micronesia Area: 271 square miles (702 sq km) Population: 106,836 Capital: Palikir

11) Palau Area: 177 square miles (459 sq km) Population: 20,956 Capital: Melekeok

12) Marshall Islands Area: 70 square miles (181 sq km) Population: 67,182 Capital: Majuro

13) Tuvalu Area: 10 square miles (26 sq km) Population: 10,544 Capital: Funafuti

14) Nauru Area: 8.1 square miles (21 sq km) Population: 9,322 Capital: No Capital


Briney, Amanda.

continue reading below our video

What are the Seven Wonders of the World

(28 December 2009). “Geographic Profile of Oceania – Learn Important Facts about the World’s Oceania Region.” Geography at About.com. Retrieved from: http://geography.about.com/od/specificplacesofinterest/a/oceania.htm

Rosenberg, Matt. (n.d.). “Countries of Oceania.” Geography at About.com. Retrieved from: http://geography.about.com/library/maps/blrocean.htm

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Nassau & Paradise Island | The Official Site of The Bahamas

Posted: July 1, 2016 at 2:43 pm

The Bahamasinvaluable jewels of creation. My island is one of its finest, offering something to do for everyone we host.

With the lure of a big city and the ease of tropical utopia, Nassau & Paradise Island are considered by many as, well, paradise. Nassau, the capital of The Bahamas, is a bustling metropolitan hub full of culture and modern amenities. To the north lies Paradise Island. Its name tells you everything. Its 685 acres of pure euphoria, developed almost exclusively to delight and accommodate visitors. The island boasts resorts, hotels, restaurants, shops, nightlife, a golf course, an aquarium and a casino. To download our Downtown Nassau/Paradise Island/Cable Beach Map & Visitor Guide please click here

Nassau, the capital city of The Bahamas, is located on 21-mile-long New Providence, our 11th largest island. Nassaus main harbor is protected by Paradise Island. The harbor attracted settlers in the early days, particularly pirates. In fact, Nassaus population consisted mainly of pirates until 1718, when The Bahamas first Royal Governor, Woodes Rogers expelled them, restored order and built Fort Nassau. The Bahamas for centuries adopted Rogers motto, Expulsis Piratis, Restituta Commercia, which means, Pirates Expelled, Commerce Restored. Now, 212,000 people call New Providence Island home, with a large portion of them residing in Nassau.

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Bahamas: Maps, History, Geography, Government, Culture, Facts …

Posted: June 19, 2016 at 3:46 am

Sovereign: Queen Elizabeth II (1952)

Governor-General: Dame Marguerite Pindling (2014)

Prime Minister: Perry Christie (2012)

Land area: 3,888 sq mi (10,070 sq km); total area: 5,382 sq mi 13,940 sq km)

Population (2014 est.): 321,834 (growth rate: 0.87%); birth rate: 15.65/1000; infant mortality rate: 12.5/1000; life expectancy: 71.93

Capital and largest city (2011 est.): Nassau, 254,000

Monetary unit: Bahamian dollar

More Facts & Figures

The Bahamas are an archipelago of about 700 islands and 2,400 uninhabited islets and cays lying 50 mi off the east coast of Florida. They extend for about 760 mi (1,223 km). Only about 30 of the islands are inhabited; the most important is New Providence (80 sq mi; 207 sq km), on which the capital, Nassau, is situated. Other islands include Grand Bahama, Abaco, Eleuthera, Andros, Cat Island, and San Salvador (or Watling’s Island).

Parliamentary democracy.

The Arawak Indians were the first inhabitants of the Bahamas. Columbus’s first encounter with the New World was on Oct. 12, 1492, when he landed on the Bahamian island of San Salvador. The British first built settlements on the islands in the 17th century. In the early 18th century, the Bahamas were a favorite pirate haunt.

The Bahamas were a Crown colony from 1717 until they were granted internal self-government in 1964. The islands moved toward greater autonomy in 1968 after the overwhelming victory in general elections of the Progressive Liberal Party, led by Prime Minister Lynden O. Pindling, over the predominantly white United Bahamians Party. With its new mandate from the black population (85% of Bahamians), Pindling’s government negotiated a new constitution with Britain under which the colony became the Commonwealth of the Bahama Islands in 1969. On July 10, 1973, the Bahamas became an independent nation.

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Jews in Europe in the wake of terror attacks – Video

Posted: April 8, 2015 at 5:51 pm

Jews in Europe in the wake of terror attacks
World Insight returns to Denmark more than six weeks after the capital Copenhagen was rocked by a terrorist attack. An Islamist gunman opened fire on a free speech forum and a Jewish synagogue,…

By: CCTV News

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DNA 31st March 2015 – Video

Posted: at 4:43 am

DNA 31st March 2015
MQM vs Imran Khan, Headlines 31st March 2015, Best Of Khabarnaak, Aapas Ki baat, On The Front, Capital Talk, Khabarnaak, Hasbehaal, Aapas Ki Baat, Kharra Sach, NewsEye, Headlines, Kal Tak,…

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Rand Paul: 'I will run for president'

Posted: at 4:41 am

Video will begin in 5 seconds.

CERN restarts ‘Big Bang’ Hadron Collider

Kenyan survivors recount university attack

Stunning views of Earth from space

UN seeking consensus on Yemen resolution

Castro in public for first time in over a year

RAW VIDEO: US Senator Rand Paul launches his 2016 presidential campaign with a combative address against both Washington and his fellow Republicans, declaring “we have come to take our country back.”

Washington: As supporters cheered and waved banners reading “Defeat the Washington Machine”, Rand Paul, a senator and son of a congressman and presidential candidate, announced his own candidacy for the Republican nomination for the White House at a rally in Kentucky on Monday.

Despite his long and powerful ties to the capital and its politics, Senator Paul insisted he would be an outsider candidate.

Senator Rand Paul, in Kentucky on Tuesday, announces he would like to be president of the US. Photo: AP

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