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Comparing Capex Growth for RIG, ESV, OII, and OIS

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Nov. 25 2015, Updated 1:54 p.m. ET

RIG was the capex growth leader

In this article, we will compare the capex growth of our select group of oilfield services companies. Transocean (RIG) recorded a 158% 3Q15 capital expenditure (or capex) growth compared to the year-ago quarter. This is the only company in our select portfolio to have achieved capex growth. In 3Q15, RIG spent $940 million on capex compared to $365 million a year ago. The 3Q15 capex was due to RIG’s major construction projects and other shipyard projects. This included the final shipyard payment for the Deepwater Thalassa, a drillship operated by RIG in the Gulf of Mexico. RIG makes up 0.03% of the SPDR S&P 500 ETF (SPY).

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ESV and OII reduced capex

Ensco (ESV) recorded a 13.5% 3Q15 capex reduction compared to the year-ago quarter. In 3Q15, ESV spent $532 million on capex compared to $615 million a year ago. The company has been upgrading many of its floaters over the past few years. In 2016, the company plans to spend the majority of its capex on newbuild rig construction.

Oceaneering International (OII) recorded a 44% 3Q15 capex drop compared to the year-ago quarter. In 3Q15, OII spent $44 million on capex compared to ~$80 million a year ago. OII plans to invest further in survey-based and satellite-based positioning, data solutions, and in its Subsea Asset Integrity segment.

OIS cut capex the most

Oil States International (OIS) reduced capex by 60% in 3Q15 over 3Q14. In 3Q15, OIS spent $23.5 million in capex compared to $59.3 million a year ago. In 3Q14, OIS invested in facility expansions in the offshore products segment, primarily in the UK. It also deployed completion service equipment in the US shale plays.

Next, we will discuss these companies’ free cash flow growth.

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