Decent 1Q16 revenues sent Flowserve’s shares to a high of $49.52 in early trading. The stock closed at $48.81, 2.9% higher than its opening price of $47.42.
OFS companies are impacted by rig counts and energy prices. In the past year, WTI crude oil prices fell ~12%. Crude oil prices have fallen since June 2014.
Baker Hughes increased its dividend from fiscal 2013 through fiscal 2015. In fiscal 2015, Baker Hughes’ dividend per share increased by 6.3% to $0.68 compared to $0.64 per share dividend in fiscal 2014.
Dril-Quip’s historical valuation, expressed as EV-EBITDA multiple, was moving in a range from fiscal 2009 to fiscal 2013 before it fell in fiscal 2015.
Cameron International is the only company in our group that reported positive fiscal 4Q15 net income. Its fiscal 4Q15 net income fell 51% to $125 million.
Cameron International has done better than most of its peers in the stock market in the past year. Since February last year, its stock has returned 40%.
The EIA estimates that Utica Shale natural gas production reached ~3.2 Bcf (billion cubic feet) per day in January 2016. That’s ~2.2% more than production in December 2015 and 54% more than production in January 2015.
From fiscal 4Q14 to 4Q15, all of Cameron International’s (CAM) segments recorded lower revenues. The Valves and Measurement segment suffered the biggest revenue decline.
Schlumberger (SLB) has had a fair run in the stock market so far in 2015. On November 20, 2015, SLB was trading at $77.15, which was 8% lower than its price at the beginning of the year.
The stock market’s two-day rally stalled on November 4 after Janet Yellen, the Federal Reserve chair, commented about a possible rate hike in December 2015.
Schlumberger (SLB) is set to announce its 3Q15 earnings after the market closes on October 15, 2015. Since January 1, SLB has slightly outperformed the OFS industry and some of its peers.
In the 12 months ended October 2, 2015, the US onshore rig count fell by 1,082, or 58%. The count decreased the most in Texas, where 60% of rigs shut down.
During the week ended September 25, the US onshore rig count fell by six from the previous week’s count. In the last five weeks, 48, or 6%, of onshore rigs have been idled.
The Material Adverse Effect Clause in the Cameron-Schlumberger merger has several exceptions, including weather-related events such as natural disasters.
The Material Adverse Effect Clause in the Cameron-Schlumberger merger has several exceptions, including changes to the economy or financial market in general.
In the Cameron-Schlumberger OneSubsea joint venture, there’s a disproportionate effect clause addressing carve-outs that affect either company in a disproportionate way.
Schlumberger (SLB) provides technology, project management, and information technology services to the oil and natural gas exploration and production industry.
Cameron (CAM) provides oil drilling equipment to the oil and gas industry via four business segments: Subsea, Surface, Drilling, and Valves & Measurement, or V&M.
During the week ended September 11, the US onshore rig count fell by 14 from the previous week’s count. Last week, there were 817 land-based rigs, including four inland water rigs.
During the week ended September 4, the US onshore rig count fell by 16 from the previous week’s count. Last week, there were 831 land-based (or onshore) rigs.
The financial terms of the Schlumberger-Cameron merger hold that Cameron shareholders would own ~10% of the entity. Cameron traded at a ~4.8% discount.
OneSubsea’s importance can be best seen in its activity since the beginning of this year. But Cameron’s order backlog was down by 12% at the end of 2Q15.
Schlumberger’s operating performance declined more than Cameron’s in 1Q15 and 2Q15—Cameron has managed to steady its ship better than Schlumberger has.
Until now, energy drilling firms were offering bonds for postponing a cash deficit. These firms could witness greatly reduced access to debt capital markets.
Energy ETFs such as the Energy Select Sector SPDR ETF (XLE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) posted weekly gains last week.
The US onshore rig count was on a continuous slide until the week ended May 22, having fallen for 25 straight weeks. The onshore count seems to have bottomed out since then.
Eight new projects are expected to start in the Gulf of Mexico in 2015. This could explain the sharp rise in offshore rigs we’ve seen over the last couple of weeks.
During the week ending July 2, 2015, the US land-based, or onshore, rig count rose by two from the previous week’s count. Last week, there were 833 onshore rigs.
During the week ending June 19, 2015, the US land-based, or onshore, rig count didn’t change from the previous week’s count—there were 830 land-based rigs.
Crude oil prices are feeling the pressure as the US dollar rises and expectations linger over whether oil production will stay high with OPEC. This is a reason to worry about oversupply.
OIH is a good proxy for playing energy prices because the fortunes of OFS companies tend to be closely linked to those of upstream, or exploration and production, companies.
The horizontal rig count fell by 29 for the week ended April 17, 2015, from the previous week’s count. This represents the 21st straight week of decline.
Falling crude oil prices have affected US onshore rigs the most. Some of the unconventional resource shales have higher exploration and production costs.
In November 2014, Wayfair declared its quarterly results and reported revenues of $336.2 million, an increase of 41.2% year-over-year and above what analysts had expected.
Mohawk Industries (MHK) entered into a definitive agreement earlier this month to acquire IVC Group, which is a leading manufacturer of sheet vinyl, luxury vinyl tile (or LVT), and laminate.
Viking Global Investors has reduced its stake in Illumina by 461,100 shares. The reduction is marginal, which suggests Viking Global is positive in regards to the company’s performance.
Since the last quarter of 2014, the crude oil price fall has led to spending cuts by some major energy upstream players. Energy prices can hurt Halliburton.
CFF is a key “intermediary” between a company and its sources of capital. It shows cash returned to shareholders through share repurchases and dividends.
Omega Advisors opened a new 1.36% position in Intercontinentalexchange (ICE), a leading operator of global markets and clearing houses, in the fourth quarter.
Cooperman seems to be following the trend of other other hedge funds such as Third Point and Paulson to capitalize on consolidation in the telecom space.
Gaming and Leisure Properties (GLPI) is a new position initiated by Omega Advisors last quarter. Gaming and Leisure Properties is the first gaming-focused REIT, which was spun off from Penn National Gaming (PENN).
