Diamond Offshore Drilling Inc

Offshore drilling (XLE) (IYE) is a capital-intensive industry requiring a large amount of money to keep rigs active and well-maintained.

The offshore drilling industry made headlines last week, especially Seadrill (SDRL), which reached a 52-week high of $0.73.

Most offshore drilling stocks traded in the green in the week ended July 13. The best performer during the week was Noble.

Seadrill and Diamond Offshore have more than 20 floaters in their fleets. Ensco and Rowan Companies have more jack-ups in their fleets than peers have.

The marine oil spill in April 2010 was the worst environmental disaster in US history, causing millions of barrels of oil gushed into the Gulf.

As of July 25, 2017, Transocean (RIG) had a backlog of $10.2 billion—compared to $10.8 billion in April 2017.

Oil is one of the most important and most frequently traded commodities, and offshore drilling is an integral part of the oil industry.

Article focus In this article, we’ll discuss analysts’ target price revisions for offshore drilling companies in Week 8 of 2018 (ended February 23). Revisions in Week 8 Jefferies revised its target prices for two offshore drillers. On February 21, 2018, it reduced the target price for Transocean (RIG) to $12 from 413 and maintained a […]

RDC’s analyst recommendations Analysts’ consensus rating for Rowan (RDC) is 2.6, which means a “hold.” Peers Transocean (RIG), Diamond Offshore (DO), Noble (NE), and Ensco (ESV) also have “hold” ratings. Of the 31 analysts covering Rowan (RDC), 39% recommend “buy” or some equivalent, 55% recommend “hold,” and 6% recommend “sell.” Among the top offshore drilling stocks […]

In the last part of this series, we saw which offshore drillers had the highest and lowest falls in their backlogs. In this article, we’ll compare offshore drillers’ backlogs versus their revenues.

In Week 25, which ended June 22, Jefferies downgraded one offshore driller and revised the target prices for others.

On June 7, Noble (NE) released its June fleet status report. Most of the offshore drilling companies don’t publish a monthly fleet status report.

Seadrill Partners’ (SDLP) vessel and rig operating expenses fell 3% to $94 million in 4Q17 compared to $96.9 million in 3Q17.

Baker Hughes released its US crude oil rig count report on December 29. It reported that US crude oil rigs were flat at 747 on December 22–29, 2017.

The rig utilization rate has drastically fallen compared to its historical rates. The utilization rate is an important indicator to gauge demand and activity in the offshore drilling industry.

The offshore drilling industry has a high degree of financial and operating leverage, which forces participants to engage in price competition.

Even in the same category of rigs, different water depth capabilities cause offshore drilling day rates differ. Day rates are also impacted by region.

The majority of offshore operations occur in six key locations worldwide that differ widely in terms of water depth, weather conditions, and remoteness.

Overall, Rowan Companies (RDC) has a comparatively stronger backlog. Higher backlogs are associated with stable revenues in the short to midterm, which reduces risk for investors.

As the above chart shows, Seadrill (SDRL) has the highest leverage, with a debt-to-asset ratio of 46%. Ensco (ESV) has the second highest ratio at 36%.

Business fixed investment represents business spending on plants, equipment, and machines. It forms an important component in the calculation of economic output.

On Tuesday, April 14, the U.S. Bureau of Labor Statistics released its PPI (Producer Price Index) figures for February. The PPI gained 0.2% in March.