CH Offshore

[Nick]

With the emergence of shale gas (land based) - deep sea exploration could take a back seat unless oil prices see a sustained revival. If I m not wrong, the demand-supply imbalances appear to be more balance now - can read from Jaya presentations.

OSV is a niche part of shipping and is a derived demand. Due to some darling counters - Ezra and Swiber before GFC and Ezion - it seems to be an important sector. However, as it is - it is a tough industry with no absolute competitive advantages. If we look at Ezra in its present state, one can really wonder why Ezion is so special. Even Jaya is also becoming a specialised yard cum operator. Speaks so much of the status of yester-years.

As for container shipping, my view is always the same - 3 years bull with 7 years bear. NOL without GLC status is a waste of time - if STX Pan Ocean is history and First Ship Trust have so much problems - only the parentage stands out as a difference.

I have absolutely no clue on how container shipping bleeds and have no $ and interest to see scarce $ burn.

Odd Lot Vested
CHO, Ezra, Jaya, NOL

CH offshore is more of a offshore marine play...
I know, 2 years ago, offshore marine was facing oversupply of vessels...not sure if this is still the case..
Can anybody enlighten me?

Ya, i do hope shipping is turning around....got a fair bit on NOL...haha

My humble guess will be the nature of the business ? Ezion is primarily an offshore rig owner cum operator enabling it to derive lucrative recurring cash-flow from its long-term charter contracts. Ezra is primarily an engineering company specializing in the offshore industry with a fleet of chartered-in vessels. The cash generating abilities of both business differs. Does that make Ezion a sure bet ? Honestly, I have no idea since I never read up on liftboats & jackup rigs charter rate trends.

With regards to CHO - I think the main bug bear is the receivables issue. Firstly, an impairment will wipe out a chunk of their NAV and secondly, they will need to recharter the vessels. Personally, if rechartering at rates of similar level of profitability is a non-issue, the Management would have easily 'defaulted' from the charter contracts long ago. I could be wrong though. Let's wait and see. I don't think this will threaten its ability to survive due to the rock solid b/s.

(Not Vested in Ezion, Ezra, CHO)