Susquehanna Revises Target Prices of Offshore Drillers
On June 20, 2017, Susquehanna cut the target price for many offshore drillers (XLE).
On June 19, 2017, Piper Jaffray downgraded Atwood Oceanics (ATW) to “neutral” from “overweight.”
Oil prices are once again on a downward trend due to high inventory levels and doubts about OPEC’s ability to implement production cuts.
Seadrill (SDRL) stock reached a 52-week low of $0.42 on June 15, 2017, but among its peers, it’s the only stock with a positive month-to-date return.
According to its latest fleet status report, Noble secured two new contracts, but it also reported one contract termination.
Last week (ended June 16), Atwood Oceanics was the worst-performing offshore drilling stock, while Rowan was the only stock among peers to see gains.
Analysts had mixed reactions to the offshore drilling industry’s first merger since the downturn started.
Last week Ensco (ESV) announced its decision to acquire Atwood Oceanics (ATW) in an all-equity transaction.
The US offshore rig count for the week ended June 2, 2017, was 23. There hasn’t been any change in the rig count in the past two weeks.
Jefferies has a “buy” rating on Noble (NE). On May 24, 2017, Jefferies reduced its target price to $7. On May 18, Instinet upgraded Noble to “neutral.”
Credit Suisse reduced the target price for Rowan Companies (RDC) to $17 from $21. It maintained a “neutral” rating on the stock.
On May 23, Goldman Sachs upgraded Atwood Oceanics stock to “neutral” from “sell.” The company is viewed as an attractive merger and acquisition target.
Atwood Oceanics (ATW) expects the offshore drilling industry to remain challenging for at least the next year. However, it’s optimistic about a comeback.
Seadrill’s (SDRL) stock prices have been falling for quite some time. The stock has lost 84.6% of its value since the beginning of the year.
Seadrill Partners’ cash and cash equivalents rose to $862 million at the end of 1Q17—compared to $767 million in 2Q16.
In 2Q16, Seadrill Partners cut its quarterly dividends to $0.10 per share—equivalent to an annual distribution of $0.40.
In 1Q17, Seadrill Partners’ (SDLP) adjusted EBITDA was $261.3 million—compared to $210.4 million in the previous quarter.
Seadrill Partners’ (SDLP) vessel and rig operating expenses fell 10% to $75.8 million in 1Q17—compared to $84.3 million in 4Q16.
Seadrill Partners’ (SDLP) backlog stood at $2.1 billion on May 24, 2016. The backlog fell from $2.2 billion in February 2017.
In 1Q17, Seadrill Partners’ (SDLP) operating revenue fell to $327 million from $353 million in 3Q16. Its revenue fell for the fifth consecutive quarter.