Hi AHS,
I'm just an armchair warrior, of Private rank, so even I wouldn't take my OSV industry prediction at all.
Though it sounds very reasonable that OSV might bottom and start to pick up in a couple of years, my thinking that MRM will survive to FY17, and possibly into FY18, without needing any cash injection or bankruptcy are solely based on its own balance sheet.
As discussed in another thread with Croasian and others, MRM's financial position at last June 30th are not as terrible as it appear. That even assuming no new cash inflow, MRM could still managed to meet all its short-term (12 months) obligations.
That mean it could meet the now-extended $37.5M repayment and other obligations on time.
But given the extension, the new contract win with its new vessel; the potential win for another new vessel; the ramp up of INPEX and other NW Shelf projects that have been greenlighted before the oil cash two years ago... MRM today is in a better financial position than it was at end of last FY16.
My original investment trigger was whether or not MRM will survive this downturn. It looked like it would back in late 2015; look a lot weaker this past FY16... but with today's announcement, it's looking stronger financially.
So to me, MRM won't be going broke and won't be needing a cap raising. Meaning it'll survive the next couple of years with little chance of the great dilution. If a company won't go broke but are selling at some 20 cent on the much written-down NTA, I'm happy with the chances that the investment will work out quite well on the asset, bargain hunting basis, alone.
As to earnings... when the industry gets back up, and I think we all agree that it will at some not too distant future... then valuation based on earnings will make the current share price seem like a joke.
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Now for the industry prediction...
I'll take Jeff Weber's words that there will be a lag between oil price rise/rebalancing and OSV businesses. He was also saying two years, from memory.
To my thinking, Oil will rise back quicker than the market is expecting. For one, there never really is any "oil glut". I mean, 1.9m BOE excess sounds like a lot, but that's a mere 2% above daily consumption.
That kind of glut, running for two years would supply some two weeks of world consumption.
Wells do run low, people do want to make money selling less... So all these talk of glut are for geopolitical and corporate strategy, not real economics of supply/demand.
Then there's Trump and his billionaire buddies hell bend making fossil great again.
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