our overall portfolio this sector and this company seemed like the logical place to put cash in at this point of time.
They have paid steady stream of base 10 NOK dividend for years. On top of that there has been an extraordinary dividend in most years between 2007 and 2013.
2007 NOK 10 per share
2008 NOK 25 per share
2009 NOK 25 per share
2010 NOK 10 per share
2011 NOK 20 per share
2012 NOK 20 per share
2013 NOK 20 per share
According to 4Q 2013 presentation: "The Board of Directors will propose to the AGM in May 2014 to distribute NOK 10 as ordinary dividend and NOK 10 as extraordinary dividend".
My logic here is quite simple:
- I believe there is significant margin of safety long term (as in 5-10 years) when buying the company below 200 NOK.
- Yield is very attractive for 2014 (and I believe beyond)
- Future upside potential via new builds to the ultra deep water segment
- Bolette Dolphin: delivery date Feb 2014 (new build ultra deepwater drillship). It has four-year contract with Anadarko for international operations.
- Bollsta Dolphin: Delivery 3Q 2015 (new build ultra deepwater semi-submersible). It has five-year contract with Chevron for operations West of Shetland in the UK sector.
- Fred Olsen Energy web site
- 4Q 2013 presentation
Author is long Fred Olsen Energy at the time of writing.