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Seadrill Partners Resumes Dividends before Its 2Q17 Results

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Seadrill Partners Resumes Dividends before Its 2Q17 Results PART 1 OF 4

Seadrill Partners Stock Rose 17.9% in the Last Trading Session

Seadrill Partners stock

Seadrill Partners (SDLP) stock closed at $3.15 on August 17, 2017. The stock rose 17.9% in one day, which brought its YTD (year-to-date) return to -25%. Seadrill (SDRL) stock fell 10.8% on the same day, which brought its YTD fall to 91.8%. Seadrill is Seadrill Partners’ parent company. Almost all of the other offshore drillers traded in red on August 17.

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Stock performance

The following are the stock returns of offshore drilling (IYE) stocks on August 17:

  • Transocean (RIG) fell 4%.
  • Diamond Offshore (DO) fell 0.95%.
  • Ensco (ESV) fell 2.8%.
  • Atwood Oceanics (ATW) fell 2.6%.
  • Noble (NE) fell 1.9%.

Why Seadrill Partners stock rose

Why did only Seadrill Partners’ stock rise yesterday? On August 17, Seadrill Partners announced that it completed amendments of three secured credit facilities, which relate to rigs purchased by the company from Seadrill. The amendments insulated the company from events of default related to Seadrill’s use of Chapter 11 proceedings to implement the restructuring plan. In April, Seadrill Partners deferred its distributions. After the insulation, the company also resumed dividends. The company declared a dividend of $0.10 per share for 1Q17 and 2Q17.

So, why did Seadrill stock fall? Seadrill is one step closer to filing Chapter 11. Seadrill emphasized that it thinks the restructuring plan will result in substantial impairment or conversion of bonds and stakeholders will incur huge losses. It also warned that shareholders will have “minimal recovery” for their existing shares.

2Q17 results

Seadrill Partners is set to release its second quarter results on August 24, 2017. It will conduct a conference call the same day. In this series, we’ll look at analysts’ 2Q17 revenue and EBITDA estimates for Seadrill Partners.

In the next part, we’ll start with revenue estimates for Seadrill Partners.

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