WHY? - cos lange took time to explain in depth to a couple of analysts who will then spread the word to their clients. how long that process takes i dont know, but it wont be long.
anyway i just to share the highlights i found from todays brr.
a good & simple explanation of the earnings drop in 2nd half, due to the dry docking of one vessel. considering the $$ they bring in, it shows how important they are, and how important it is to acquire more, or ensure the relationship with groups like mermaid remain strong.
a lengthy explanation of the contract in the north sea. clearly it is now the most important contract to date, and for several reasons. firstly it is showcasing nepsys to the major O&G companies, specifically how nepsys can provide longer term certainty to subsea infrastructure (to a limit of 30 metres currently, but further R&D providing greater depths in the future) secondly this is an ongoing contract, where they return annually to attend to issues to the rig structure. as mentioned, the north sea only allows such work during summer months, therefore ensuring nepsys personnel arent tied up for any long term period on one project. i was impressed with the detail given to explaining nepsys, and specifically the example in the current north sea project. manned platforms demand permanent welds, and only nepsys and hyperbaric welding provide such. the fact nepsys costs about 1/4 of the only competition confirms the enormous future for nepsys technology (and for us long termers the original reason for investing in neptune.)
the establishment of the brazil base by the end of 2009. reading the constant industry media from brazil says brazil are determined to bring these huge fields online ASAP, with the government determined to use the income to run their social programs. sending some of the newly acquired ROV's to brazil tells me they do have work lined up - its just a case of getting established there.
lange spoke of acquiring 2 deepwater ROV's - i can assume that they may also be from these distressed sales. i highlighted a while ago that several smaller companies purchased these expensive units during the $100+ oil days, only to find the contracts dried up and work vanished. additionally another vessel is to be purchased - with a capex of $15m on the 2 rov & the vessel, either these sales are real fire sales, or its just another dinghy they are buying.
the cocono survey work i found interesting - which fields ? their karoon JV is in the news currently, and will prove to be a significant field once work begins. being onside with cocono when the JV contracts begin will prove lucrative.
an attrition rate of 2% of staff is important in this industry - experienced, qualified, respected staff, especially in the technical arenas are gold, and to be able to retain them to that degree is superb. hopefully that continues.
i did like the way lange detailed the pluto work - the LNG project that IS HAPPENING. it was mentioned $20m will come from the spool tie work, and the same again from other jobs. $40m overall aint to bad huh ? and having neptune staff based at woodsides HQ - interesting.
VERY BULLISH on the STS acquisition - not too surprising considering the workload the rov's are likely to get. i think lange did well to emphasise that this was an acquisition that will go ahead, especially after the recently abandoned US deal.
a good explanation of the geomatics/survey business, and how fugro dominate that field. to gain 'tens of millions' of revenues in such a high margin business is very pleasing.
for the risk adverse, a neat explanation of the diverse customer base neptune now work with - nobody provides more than 10% of earnings, compared to our previous reliance on apache for work.
i personally was extremely pleased the session extended into the Q&A session - it is often these sessions bring out more info than the presentation itself. i would like to know what the question was which lange answered referring to 'lump sum projects'.
ALL IN ALL, LOVED IT.
NMS Price at posting:
32.5¢ Sentiment: Buy Disclosure: Held
