"Bearing in mind BLY is a global company with ~80% of operations ex-AU and the profile of buyers would be smaller market participants in an already over-supplied local market". As I said, the list I saw was only for Asia Pacific. If this list turns out to be authentic, it's not a great leap in thought, that there is little doubt that other regions have been asked to prepare the same. What happens locally, is within the context of the global industry. When I comment on BLY, its done in this context.
"storage costs, keep paying maintenance costs, keep impairing the asset every accounting period on rigs that aren’t likely to spin in the foreseeable future." I doubt, given their current situation that they'd be that dumb in paying maintenance out on stationary equipment (less its one getting ready to go out). More like they'd be used as donors for spare parts for other rigs. What was their equipment right-off period? 5 years?
"Kicker is, when and old unused rig does get a contract to spin, the up fit costs to mobilise and meet current safety standards are costly too". That's an assumption. If you believe in BLY's management spin, they're awesome, their gear is awesome and we (they) live in a world of awesomeness! Yes, but why sell the gear, and give you competition a helping hand?
Price is King and the era of the Brand is DEAD, so anyone with a rig and management system to a Clients spec, is competition (for that matter, any contractor that is cash flow positive, is already streets ahead of BLY). Selling their own rigs, that they have lauded to all as being good enough for the worlds largest and most innovated contractor, must be ok for the single rig or small fleet operator (?). BLY have not been able to come to terms with this concept. I posted 2 years ago that they were scraping (cutting up) rigs in Brisbane, and how that was a good idea. Keeping the availability of gear off the market. Since then there's been a management change, and obviously (possibly) a different direction. Flooding an already flooded market, where drillers with the ability to buy, have buyers fatigue.........they're 3 years to late to that party.
BLY, if this is true, will possibly keep this as quite as possible, as most observers will realise how damaging it is.
The pain again goes to the Holders. (but not if you came in at the recent low.......well done to you!)
Short term sentiment may change BLY's SP, but it's fundamentals won't. I was hoping that there may have been of a change, but I'm a glass half full now, on how long this breakout from .5c will last.
BLY Price at posting:
10.0¢ Sentiment: None Disclosure: Not Held
