Hurricane Alex Isn't BP's Only Worry These Days in Gulf Waters

BP plc (BP-$28.88) spokesperson Toby Odone acknowledged to reporters last week that the 45-ton blow-out preventer sitting atop the damaged Macondo wellbore was leaning, up to 15 degrees by some accounts.

We know little about the underlying geology of the spill site in the Gulf of Mexico, as BP has held that information close, claiming that it’s “proprietary” data. Scientists are clamoring for BP to publicly release geological survey data on the underlying “Lower Teriary” formations (rock layer formed 65 million to 250 million years ago). Remotely operated vehicles (ROVs) are streaming video feeds of high pressure columns of oil and gas bubbling up from fissures in the sea floor — which outside scientists fear could be flowing from stress fractures in the underground piping.

Could an already weakened sea bottom beyond the wellbore (eroded by up to 100,000 pounds per square inch of corrosive fluid pressure seeking escape upward from the leaks in the undersea piping) crack wide open like ice on a pond, spewing millions of additional barrels of oil into Gulf waters? Read More …

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

U.S. Drill Plan Impacts Transocean's Drilling Worldwide

Transocean’s (RIG - $52.00) ‘at-risk’ contract backlog from U.S. offshore Gulf operations was a nominal 6.4 percent, or $1.8 billion out of total company backlog of $27.9 billion as of June 1. However, should the Obama administration gain the upper hand in reinstating its deepwater drilling ban in offshore U.S. waters, profit-performance could be impacted on a global scale.

Read More ….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

BP's Oil Spill Costs in Gulf Accelerating -- Next Stop: $3.0 Billion

British oil major BP (BP-$29.68) said response efforts toward the oil spill in the Gulf of Mexico – including containment, relief well drilling, grants to the Gulf states, and payment claims – had soared to approximately $2 billion so far, up from $450 million on May 13.

Sanford C. Bernstein Ltd. expects the bill to rise to $3.5 billion by the time relief wells are scheduled to stop the flow of oil and gas from the sea floor in August.

Will BP bankruptcy talks resurface if the company can't turn the corner - and capture more oil than what's spilling into Gulf waters? Read More ….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

BP Walking Plank to Insolvency?

As of June 14, BP (BP-$31.71) has paid out approximately $1.6 billion – spill response, containment, relief well drilling, grants to affected Gulf states, claims paid, and federal — in costs related to the oil spill in the Gulf of Mexico. In addition, BP is financially vulnerable to substantial putative penalties, even without a showing of wrongdoing on its part.

BP shares have lost approximately $90 billion in value, or 51 percent, since the Deepwater Horizon accident touched off the Macondo field blowout in late April.

Cost to bond traders for five-year insurance protection against nonpayment (per contract covers $10 million in face value), better known as credit default swaps (CDSes) is soaring: the price to insure $10M in BP debt this morning was $575,000, up from $43,200 on April 22, the day the Transocean -leased semi-submersible drilling rig sank.

Insurance on BP’s one-year swaps is more expensive than for its five-year debt, another sign of the company’s alleged “short-term credit distress” risk. Is the U.K.-based oil major walking the plank to bankruptcy? Read More ….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

What Do Supermodel Gisele Bündchen, Suntech Power, and Yingli Green Energy Have in Common?

Does anyone remember the good old days – back in 2007 and 2008 – when über-supermodel Gisele Bündchen demanded to be paid in euros? So keen was she on avoiding the US currency because of uncertainty over its strength…. Flash forward to 2010.

Suntech Power Holdings (STP-9.33) could see a 79 percent drop in profits if the euro establishes U.S$1.25 as a new ceiling – even with hedging efforts – according to a recent Bloomberg Businessweek interview with Barclays analysts.

That the falling euro has been difficult to manage is further underscored by recent efforts at solar-cell rival, Baoding-based Yingli Green Energy Holding (YGE-$9.67):

Continue Reading at BNET ENERGY….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

BP Acting Like Three Stooges -- Why Not Learn From Them, Too?

For weeks BP and the White House had confidently told the American public that the oil spewing out of the busted wellbore from the sunken Deepwater Horizon rig was 5,000 barrels per day (210,000 gallons). An internal BP document, dated April 27, showed that number to be misleading. Rep. Ed Markey said at a House Natural Resources Committee meeting on May 26 that BP scientists actually thought the leak to be upwards of 14,000 bpd. Outside analysts estimate the daily spill rate could be much higher — up to 95,000 barrels, or nearly 4 million gallons!

"If at first you don't succeed, keep on suckin' til ya do suck seed!" ~ Curly

Is President Obama just "a victim of coicumstance?" With his poll numbers sinking — and no tangible evidence that BP is even close to plugging the spill — the Obama administration has turned to friends in Hollywood for help. Word has leaked that Avatar director James Cameron is now consulting with U.S. officials on possible solutions to the spill.

Instead of Cameron, maybe its time to call in Moe, Larry, and Curly: “At yer service, day or night, we do the job and do it right...”

View Three Stooges Video on How to Plug Oil Gusher ….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

LDK Solar Forecasting Profitable 2010

LDK Solar (LDK-$5.10) believes firmer selling prices and falling production costs will help the wafer and module maker repair compressed margins in the next few quarters.

Despite market fears that demand would drop off after incentive cutbacks in essential European markets, such as Germany and Italy, come second-half 2010, chairman and CEO Xiaofeng Peng is calling for wafer and module shipments of 1.7 GW to 1.8 GW and 200 MW to 300 MW, up from 2009 year-ending estimates of 1.1 GW and 34 MW, respectively.

“The improvement in ASP trends throughout the year should allow us to expand our gross margin in the next few quarters,” said chief financial officer Jack Lai on the recent earnings call with investors. “Recent polysilicon feedstock prices reportedly below inventoried first-quarter costs of $65 per kilogram should help to boost gross margins in the next few quarters by as much as 300 basis points, up from the 15.7 percent posted in the first quarter.”

Will innovative manufacturing gains, such as increased throughput and conversion efficiency yields, help LDK avoid the commodity cliff being predicted for solar wafer makers by many semiconductor industry pundits? Read More ….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Eurozone Currency Weakness is Latest Problem for Trina Solar and Other Chinese Module Makers

China-based Trina Solar (TSL-$15.73) is a module maker whose currency mismatches are overshadowing planned shipments of 750 MW to 800 MW for the whole of 2010 (year-on-year growth of 88 percent to 100 percent). The company has significant exposure to Europe, where it derives more than 80 percent of sales. Unfortunately, even active hedging efforts won’t shield its financials: approximately 60 percent of second-quarter euro exposure is covered at contract rates of $1.30-$1.40, according to chief financial officer Terry Wang.

Total earnings for 2010 could fall more than 84 percent, if the Euro averages less than $1.25, according to Barclays Capital analysts.

The company’s guidance for gross margin in second-quarter 2010 is in the high 20 percentages. With the euro settling below $1.20 in Monday’s trading, could Trina Solar and a host of other China-based solar manufacturers face margin compressions worse than even those forecasted by Barclays Capital? Read More ….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Pivotal Meeting for Novartis' MS Drug Gilenia Next Week

The FDA has extended the review period for Novartis AG’s (NVS-$45.97) investigational multiple sclerosis (MS) drug Gilenia by three months.

Efficacy, however, is unlikely the point of contention. Regulators and physicians alike are likely concerned on scaling the balance of efficacy and the drug’s long-term safety profile. Similar to Merck KgaA’s cladribine, Gilenia interferes with the proliferation of certain white blood cells, particularly circulating lymphocytes (T cells and B-cells), which are thought to be involved in the immune-mediated and inflammatory pathological process of MS. The immune suppression activities of both experimental drugs theoretically could leave MS-treated patients vulnerable to opportunistic infections and cancers.

The Advisory Committee meeting is still planned for June 10 to discuss the benefit/risk profile of Gilenia. Assuming no new evidentiary surprises with safety, will the drug hit U.S. pharmacy shelves by year end? Read More….

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.