Category Archives: Offshore

State-run Citizens Property Insurance Corp. posted its first loss since 2005, $27.1 million, board members heard this week after more than six times that amount landed in the pockets of offshore firms for optional back-up coverage that covered no claims in a hurricane year.

It was little discussed at the meeting but available in financial records: The company shipped $181 million of its customers dollars offshore for private reinsurance, coverage that Citizens did not buy for most of its existence.

Without that spending, the company would have been comfortably in the black and could have added more money to its surplus.

A Citizens statement said, The loss comes despite minimal damage from Hurricane Matthew, the first major hurricane to impact Florida in 11 years.

Citizens officials preferred to focus instead on non-catastrophe claims they say are inflated by assignment of insurance benefits to a third party such as a roofer, or a contractor cleaning up water damage from a broken pipe. They seek state legislative action to curb what they call unsustainable abuses, especially when attorneys get involved.

The tragedy here is that the ultimate loser is the policyholder, board chairman Chris Gardner said. Higher insurance costs simply make it more difficult for more Floridians to own a home.

Citizens, which is backed by a surplus of more than $7 billion to help pay claims and a state catastrophe fund, spent nothing on private reinsurance as recently as five years ago. The $181 million went for back-up coverage to help avoid assessments to state insurance customers even after once-a-century megastorm, far worse than Hurricane Andrew. The chance of such a storm in any given year: 1 percent.

The surplus is like a savings account, a pot of money that can grow year to year in Florida to help cover claims without having to pay foreign companies. Citizens has a much bigger surplus than any private Florida-based insurer.

Private reinsurance, in contrast, involves yearly spending for coverage that lasts for short spans, such as 12 months. If coverage is not triggered by massive losses from rare storms, private reinsurers keep the money and negotiate a new bill for the next year.

Offshore reinsurance is common in the industry and helps make it possible for small private companies to offer coverage even if they have far less surplus or capital available in Florida than Citizens does. The question is whether it makes sense for Citizens, particularly when it contributes to an annual loss.

Much of the financial pinch at Citizens is related to its downsizing from 1.5 million customers several years ago to about 450,000 now, mostly through transfers to private insurers. Company president Barry Gilway has previously acknowledged we were not ready for a sudden drop in risk exposure with respect to the money it was sending offshore for reinsurance. Suddenly far fewer customers were paying premiums, but Citizens was still paying big dollars for offshore coverage.

A Citizens spokesman said private reinsurance was designed to help protect the surplus itself, by spreading some of the risk in the event of catastrophic storms. The companys offshore spending has been falling and is expected to drop to about $70 million this year, the spokesman said.

Many factors contributed to the annual loss. As Citizens has shrunk, a significant proportion of remaining customers are paying rates lower than private insurers want to charge them because state law caps Citizens rate increases at 10 percent a year.

That may help explain why as few as one of four Citizens customers are taking offers to switch to private insurers in 2017, reports prepared before the board meeting Wednesday show.

Thats about half the 48 percent who accepted offers in 2016, a further tumble from higher acceptance rates in past years.

Take the 41,628 mail offers from private insurers made to individual Citizens customers in February. Though consumers are automatically transferred unless they actively refuse the offers, only 11,017, or 26 percent, actually left.

Citizens collected $974 million in premiums in 2016 and reported claim losses of $346 million and expenses related to those claims of $167 million.

Without significant change in state law regarding assignment of benefits, Citizens will be forced to pass higher costs on to its customers, Gardner said. Several bills await action to get out committees about a third of the way through a two-month session.

Every year, we rely on standardized, accepted actuarial principles to set our rates, Gardner said Last year, the same principles that provided rate decreases to our customers in recent years translated into hikes for 84 percent of our policyholders. Without legislative changes, that trend will continue.

Citizens could avoid court costs by paying claims promptly, said Chip Merlin, president of Merlin Law Group with offices including Tampa and West Palm Beach.

Citizens management has its claims department take a tougher line to keep claims payments down so it can break even, Merlin said. Litigation goes up when claims are not paid.

STAY UP-TO-DATE

Check for updates on consumer news at protectingyourpocket.blog.palmbeachpost.com

Read the original here:

Insurer Citizens posts first loss since 2005 after $181M goes offshore - Palm Beach Post

Exxon Mobil affiliate Esso Exploration and Production Guyana Ltd. commenced drilling of the Snoek well on Feb. 22, 2017 and encountered 82 ft of high-quality, oil-bearing sandstone reservoirs. The well was safely drilled to 16,978 ft in 5,128 ft of water on March 18. The Snoek well is located in the southern portion of the Stabroek Block, approximately 5 mi to the southeast of the 2015 Liza-1 discovery.

Stena Carron drillship

Following completion of the Snoek well, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well.

As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana, said Steve Greenlee, president of Exxon Mobil Exploration Company.

The Stabroek Block is 6.6 million acres. Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Nexen Petroleum Guyana Limited holds 25% interest.

Read the original:

Exxon Mobil announces new oil discovery offshore Guyana - WorldOil (subscription)

March 31st, 2017 Jason Jiang Asia, Offshore 0 comments

The International Transport Workers Federation (ITF) has arrested offshore supply vessel Malaviya Seven in Aberdeen on behalf of the ships crew in order to recover unpaid salaries.

The vessel, which is owned by Indian owner GOL Offshore, has been detained in Aberdeen since October 2016 after the crew members claimed they had been owed salaries for several months.

Malaviya Sevens sister vessel Malaviya Twenty was also detained in UK by ITF in June 2016 over a crew salary dispute. The 12 crew from that vessel recovered their salary in February under legal assistance from ITF.

To say that workers are owed $666,938.03 is in itself a scandal. The owners and the Indian flag state should hang their head in shame. Equally all those that could have brought the situation to an end months ago should reflect on their inactivity, said ITF UK and Ireland coordinator Ken Fleming.

My organisation the ITF will now deal aggressively with the situation. Should the company or the bank not come in on record by early next week we will apply to the courts to dispose of the vessel by way of a sale to recover the crew wages. The situation will not be allowed to drag unnecessarily, Fleming added.

According to ITF, the legal process is underway and could take 12 to 16 weeks. The vessel could ultimately be sold off if the claims are not settled.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jasons access to the biggest shippers with business in China has proved an invaluable source of exclusives.

See original here:

ITF arrests GOL Offshore vessel over unpaid wages - Splash 247

Recruitment for the Oil and Gas Sector

Serving the oil and gas industry since 1988

in Aberdeen since 1988

If you are skilled and are looking for work, you have come to the right place. We have many years of international experience with trusted business connections that span the globe. We take care of the thorny bureaucratic details so you can focus on advancing your career. Our streamlined online job application facility includes engineering, drilling, marine and commercial vacancies. It is quick and simple to use, contact ustoday. We can connect you with a world of opportunity.

Why use a professonal independent recruitment agency? We have been providing personnel to industry world-wide for over thirty years. We have strong business connections from Brazil to India, from South Africa to Russia. We understand the intricacies of such international endeavors, the many pitfalls to avoid, and the enormous potential benefits of such work. There is truly a world of opportunity out there, but correctly navigating the waters makes all the difference. We want to be your partner in success.

Rigman is among the most trusted names in the recruitment business. We have built that solid reputation on 30 years of reliable performance. All job candidates are vetted on application and certificates checked with the issuing body. We know our people well. Whether your needs are permanent or for ad hoc contracts, we can fulfill your drilling, marine, engineering or commercial vacancies. We can even cater to short notice needs. Our vacancy notification system is operational and manned 24/7.

Your message was sent successfully. Thanks.

See more here:

Rigman Offshore

Recharge (subscription)

Dutch tender for joint offshore R&D projects in wind and oil & gas Recharge (subscription) The Dutch enterprise agency RVO is holding a 1m ($1.08m) tender for research and development projects that seek synergies between the country's ambitious offshore wind programme and declining oil & gas assets in the North Sea, in a bid to speed up ... and more »

See original here:

Dutch tender for joint offshore R&D projects in wind and oil & gas - Recharge (subscription)

Revenue from Sifs wind business increased to almost 352m in 2016 from just over 283m in 2015.

The sector contributed more than 75.4m to the companys overall gross profit of 86.4m, up from 59.9m out of a total of 71.1m in the previous year.

Sifs overall revenue stood at just over 400m last year, up from more than 321m in 2015.

Sif chief executive Jan Bruggenthijs described market growth in the offshore wind sector as very robust in 2016, which resulted in an extremely busy second half of the year.

He cited the companys investment in the Maasvlakte 2 plant as timely. We now have a facility that will enable us to produce XL monopiles with an 11-metre diameter, 120-metre length and 2000 tonnes weight.

This gives Sif Group a strong competitive edge, not just now, but also going forward.

In 2017, the companys contracted order book stands at 210 kilotonnes, having been 191 kilotonnes for the whole of 2016.

The contracts include work for the Norther, Beatrice, Hohe See and Rentel offshore wind farms, Sif said.

The company said it is also involved in the tendering process for other offshore wind farm developments.

The significant drop in LCOE (levelised cost of energy) may result in pricing pressure from Sifs clients, including for the projects that will continue into the 20182020 production period, Sif said.

Sif Group will protect its margins by focussing on cost reduction per produced tonne based on high utilisation of its production capacity, improving efficiency even further and actively supporting clients wishes to reduce steel weight by applying the latest innovations, it added.

Image: Sif

Read the rest here:

Sif reaps offshore windfall - reNews

Two seemingly unrelated events over the past week were positive for the offshore oil sector and the Gulf of Mexico.

Last week, the U.S. Bureau of Ocean Energy Management held Central Gulf of Mexico Lease Sale 247. While the results didnt set records, the $275 million in high bids and $315 million in total bids submitted by 28 oil companies reflected the growing optimism that an offshore sector recovery is coming. This comes after last years sale for this area was marked by historically low returns.

The other significant development came from a meeting of OPEC and non-OPEC technical officials assessing the performance of their November 2016 agreement to cut roughly 1.8 million barrels a day of oil production, equal to about 1% of global supply.

According to OPEC officials, compliance with the deal reached 94% in February. OPEC Secretary General Mohammad Barkindo noted that low seasonal demand for oil and large oil exporting countries pumping flat out at the end of the last year (prior to the start of the production cut agreement) have contributed to global oil inventories that are higher than desired. He acknowledged that lower supply volumes are working their way through the system and inventories will decline it will just take a little longer. Barkindos assessment suggests that OPEC and non-OPEC producers are likely to extend the six-month production cut when it comes up for renewal in June. Falling inventories during the second half of this year should lead to higher oil prices.

In the Gulf of Mexico, the lease sale results indicate growing producer optimism after the bottom in oil prices was reached last March. Remember, last years Central Gulf sale took place shortly after crude oil prices fell to $26 bbl., before climbing above $50 bbl.following the OPEC agreement in December.

Oil producers are always assessing exploration prospects. Their decisions about how much money to wager in a sale reflects their long-term viewson oil and gas price trends, the attractiveness of the prospect, and, importantly, cost trends related to finding and developing a prospect. The latter is particularly key, as improved drilling and development technologies can move offshore discovery production dates forward by years, dramatically improving economic returns. These improvements can also reduce the total cost to find and develop new prospects, further aiding offshore economics.

Its possible that the most significant cost improvement is coming in response to the oversupply of offshore equipment. That has led to sharply lower pricing for drilling and completions, placing significant financial strain on service companies. As these companies restructure their balance sheets and fleets in response to the downturn, evolving cost structures will lead to better offshore economics. The industry cycle is working, and last weeks events are a reflection of trends that will help the cycle along.

Visit link:

Two reasons for offshore optimism | WorkBoat - WorkBoat (blog)

Thesis:

The margin of safety in Diamond Offshore (NYSE:DO) is lacking due to issues with cash flow, minimal earnings, and high interest expense. The technical overview is negative - the company has significant debt, minimal earnings, and no dividend. The best course of action for investors is to wait and re-evaluate in the future.

Current Earnings & Outlook: (via Conference Call)

The conference call presented few bright spots for investors looking for good news. The earnings are weak and management presents a cloudy forecast for the near term.

Debt & Cash Flow:

When we compare DO against Transocean (NYSE:RIG), the level of cash flow vs. the interest expense to the debt is favorable with Transocean. Additional analysis on Transocean.

Based on the interest expense and cash flow, Diamond Offshore lacks the margin of safety one would like to see.

It would be a much more attractive situation if the company was creating enough cash flow to comfortably pay the interest expense many times over. That is not the case here. It raises the level of risk, and without near-term catalysts, we have a situation where the risk outweighs the reward.

Cash and Liquidity:

Again, the balance sheet and lack of liquidity in the company is lacking. Ideally, we would like to see a current ratio closer to 2x the debt. As a value investor, DO does not have the balance sheet strength and liquidity that would make the shares more attractive.

DO Market Cap data by YCharts

Earnings:

As we see below, the earnings for the company are minimal due to the current environment in the sector. Even if one was confident of a turnaround in the sector as management mentioned on the conference call in 2019/2020, the debt is still a concern.

At the current time, the earnings are not strong enough when considered against the sizeable debt load. Earnings are expected to be .82 in 2017 and .14 in 2018 (via IBD/ Marketsmith).

Again, the earnings provide little to minimize the risk in the shares.

RIG data by YCharts

Technical Overview:

On a technical basis, the company is performing much worse than Transocean, as Diamond Offshore has a relative strength of 5 (meaning it is underperforming 95% of stocks in the market), but RIG has a RS of 54, which is significantly higher and also it is still above its 200-day moving average.

Diamond Offshore has completely broken down technically and is well below all the significant moving averages and, as we see below, has traded down on significant volume. So, unfortunately, I see very little optimism in the technical outlook. In my opinion, the volume represents institutional pessimism on the shares and present a continued overhang on the share price.

Dividends:

The company is currently not able to pay a dividend to investors. If the valuation was more attractive, this could be overlooked. However, this is just another reason why I find it hard to be interested in the shares at this time.

Investment Recommendation:

I found RIG to trade at a discount to valuation and therefore recommended a corresponding strategy (Getting Paid to Wait on RIG) for investors interested in participating in the shares and who wanted to take some risk.

Unfortunately, due to the lack of catalysts and safety, I see no attractive options or strategies in DO. Investors should wait and see if the situation improves and re-evaluate at that time.

Conclusion:

Diamond Offshore is not attractive enough based on earnings, debt, technical factors, lack of dividend, and cash flow for value investors. Due to lack of catalysts, the recommendation is to wait and re-evaluate the shares if the situation changes.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within 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.

Read more from the original source:

Diamond Offshore: The Margin Of Safety Is Too Small - Avoid - Seeking Alpha

HOUSTON, March 29, 2017 /PRNewswire/ -- W&T Offshore, Inc. (NYSE: WTI) announced today that the Company will be participating in the 2017 IPAA Oil & Gas Investment Symposium to be held April 3-4, 2017 in New York City.

Tracy Krohn, W&T Offshore's Chairman and CEO, is scheduled to make a presentation on Monday, April 3, at 8:45 a.m. Eastern Time (7:45 a.m. Central Time). The presentation will be broadcast over the Internet. The webcast link to the audio presentation and accompanying slides can be accessed live and for replay by visiting the investor relations section of the Company's website at http://www.wtoffshore.com.

About W&T OffshoreW&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and has grown through acquisitions, exploration and development. The Company currently has working interests in approximately 52 fields in federal and state waters (50 producing and two fields capable of producing) and has under lease approximately 750,000 gross acres, including approximately 490,000 gross acres on the Gulf of Mexico Shelf and approximately 260,000 gross acres in the deepwater. A majority of the Company's daily production is derived from wells it operates. For more information on W&T Offshore, please visit the Company's website at http://www.wtoffshore.com.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wt-offshore-to-present-at-the-2017-ipaa-oil--gas-investment-symposium-in-nyc-300430820.html

SOURCE W&T Offshore, Inc.

http://www.wtoffshore.com

Read the original:

W&T Offshore To Present At The 2017 IPAA Oil & Gas Investment Symposium in NYC - PR Newswire (press release)

March 29 (Renewables Now) - GE Renewable Energy will be supplying three offshore wind turbines of the Haliade 150-6MW model for a demonstration project in China, the General Electric (NYSE:GE) unit said Monday.

Fuqing Haixia Electricity Generation Co, a joint venture (JV) between China Three Gorges Corp and Fujian Energy, will build the 73-MW Fujian Xinghua Gulf offshore wind farm using turbines by several suppliers. The deal for GE includes technical support and two years of operation and maintenance (O&M).

The US company said it will manufacture the three nacelles and generators at its Offshore Wind facility in Saint-Nazaire, France, while the blades will be made in Denmark. Towers for the wind turbines will be produced in Chengxi, China.

Installation is to take place in the closing quarter of 2017.

The Haliade turbine has been developed by French Alstom, the power and grid businesses of which were bought by GE in 2015. The US conglomerate recently got the European Commissions (EC) approval to also buy Danish wind turbine blade maker LM Wind Power. The latter is expanding its capacity after a deal to supply blades to the Haliade platform.

China ranked third in terms of total installed offshore wind capacity at the end of 2016 after adding 592 MW in the year. Chinese offshore market began what many hope is the sectors long awaited take-off in 2016, the Global Wind Energy Council (GWEC) said when releasing statistics for the past year.

Read the original here:

Chinese JV orders 3 Haliade offshore wind turbines - Renewables Now (subscription)