Japex: Bad News Out but Risk Remains with Oil Sands Just Above Cash Cost

Japan Drilling: Drops 95% on Reorganisation News and Rebounding 51% as NYK Emerges as Sponsor

A Performance Review on Our Recommended Positions for the Last Six Months

Inpex Already Double the Budget for the Ichthys Project - Can It Be Higher?

Equity Analyst, LightStream Research

Nuzran Sahib

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Oil and gas exploration and production Capex on the rise in 2018 as the producers planning to increase output amidst oil price recovery.</li>
</ul>
<ul class="">
<li>Rig counts and rig utilisation rates could improve on the back of increasing Capex in the industry from the current lows across different drill types. This should result in revenue growth for JDC in terms of high day rates.</li>
<li>Changing demand-supply dynamics in the drilling segment should increase bargaining power for drillers.</li>
</ul>
<ul class="">
<li>We expect the day rates for drills to increase beyond the estimated break-even point for JDC in FY03/19 to turn profitable.</li>
</ul>
<ul class="">
<li>If NYK is to bailout JDC, the share price of JDC could rebound significantly.</li>
</ul>


Oil and gas exploration and production Capex on the rise in 2018 as the producers planning to increase output amidst oil price recovery.


Rig counts and rig utilisation rates could improve on the back of increasing Capex in the industry from the current lows across different drill types. This should result in revenue growth for JDC in terms of high day rates.
Changing demand-supply dynamics in the drilling segment should increase bargaining power for drillers.


We expect the day rates for drills to increase beyond the estimated break-even point for JDC in FY03/19 to turn profitable.


If NYK is to bailout JDC, the share price of JDC could rebound significantly.


Japan Drilling: Bankruptcy Possible but Share Price Could Surge 5-10x If NYK Steps In