Errors by CBI and MDR management just keep compounding. If you listened to the earnings call and read the filings, then the decline in share price should come as no shock. The fundamentals of the acquisition of CBI were poor from day one, while the shoddy execution and legacy decisions continue to haunt.
MDR and Chiyoda putting out conflicting statements on Cameron reinforces the chaos around the projects and won’t help either company’s credibility.
The Golden Pass project has seen MDR’s SOW reduced to OSBL which from the street’s perspective means, “we don’t trust MDR not to gunk it up on-site.” Choosing not to bid on what once was a sole source project in Rio Grande - because terms couldn’t be worked out with Saipem - then trying to gloss over it on the earnings call didn’t fool anyone. Let’s not forget that former leaders on the Cameron project are leading the Rio Grande project and know better than most how ill equipped MDR is to execute on large scale LNG projects. That likely would have resulted in a rejected bid package and it costs money to put together bids - money MDR just doesn’t have (see publicly disclosed negative free cash flow.)
All of the uncertainty over the Anadarko merger means that any potential FID in Mozambique is further pushed out. Certainly the new owners will review the projects and gut check over whether MDR is the right company to build the project. MDR isn’t winning onshore EPC work in the US. That speaks volumes about owners’ lack of confidence in MDR. Keep watching the stock price - it’s a reflection of the true reality of the company.