Great Offshore, which was formed as a result of the demerger of GE Shipping, will be listed on the bourses on Thursday. Great Offshore, with its focus on meeting the needs of upstream oil players, such as ONGC and RIL, currently has 38 vessels. | |
| A shareholder with five shares of GE Shipping on the record date of November 15 received four shares of the shipping company and one share of Great Offshore, which was the company's erstwhile offshore division. |
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| Great Offshore, like other players in the industry, has been a beneficiary of the upturn in oil rig hire rates, given the global uptick in oil exploration activities. |
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| The government too has recently completed the bidding process under the NELP-VI, which saw participation from several global oil majors. |
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| The average age of Great Offshore's fleet is 12.3 years, which is well below the global industry average of over 20 years, pointed out analysts. Other Indian players, such as Aban Offshore, currently operate 20 rigs. |
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| Current hire rates for a rig are estimated at between $170,000-200,000 a day depending upon the specifications, as compared with $60,000 a day levels in CY04. |
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| As a result, Great Offshore's operating profit amounted to Rs 78.94 crore from its income from operations amounting to Rs 239.28 crore in the half year ended September 30, 2006. |
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| Great Offshore's operating profit margins were at 33 per cent in H1 FY07. In contrast, Aban Offshore had seen its operating profit margin in the first half of FY07 decline by 550 basis points y-o-y to 22.8 per cent, owing to rising operational costs. |
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| Meanwhile, Aban trades on the bourses at 45 times estimated FY07. Great Offshore had an EPS of Rs 19.4 (not annualised) in the first half of FY07. |
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| Before the demerger, the Great Eastern Shipping stock traded at about Rs 337 on November 7 (the value of five shares works out to Rs 1,684). |
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| Based on GE Shipping's price on November 27 (the day it was re-listed), the four shares that the shareholder received amounted to Rs 884. Hence, the intrinsic value of Great Offshore works out to Rs 801 (Rs 1,685 minus Rs 884). |
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