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Week 10: Offshore Drilling Industry Update

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Stock performances

In Week 10 of 2018, which ended March 10, 2018, all except one offshore drilling stock had positive returns:

  • Transocean (RIG): rose 1.1%
  • Noble (NE): rose 5.6%
  • Diamond Offshore Drilling (DO): rose 3.6%
  • Rowan Companies (RDC): rose 3.6%
  • Ensco (ESV): rose 7.6%
  • Seadrill Partners (SDLP): fell 5.5%

In the week ended March 9, 2018, the VanEck Vectors Oil Services ETF (OIH), which has 22.3% of its holdings in oil and drilling stocks, fell 3.4%.

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Year-to-date returns

Rowan Companies had the worst YTD (year-to-date) returns as of March 9, 2018. The stock has fallen 23.2% since the start of the year. Diamond Offshore Drilling followed, falling 18% YTD. All offshore drillers have posted negative YTD returns. Ensco has fallen 17%. Noble and Transocean have fallen 4% and 7%, respectively.

Rig count

The US offshore rig count was 13 in Week 10, down from 14 in the previous week. The offshore rig count fell by seven compared to the same period last year.

The total US rig count, including oil and natural gas rigs, was 984 in Week 10, which was three rigs more than the previous week. The rig count was significantly higher than the 768 rigs reported during the same period in 2017. The US oil rig total for Week 10 was 796, which was four less than the previous week. In the next part, we’ll see how UBS revised its target prices for Ensco and Rowan Companies in Week 10.

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