Diamond Offshore Drilling Inc

In the week that ended on April 5, upstream stock Denbury Resources (DNR) rose the most among the stocks in the energy space.

In Week 30, which ended on July 27, analysts revised their target prices for Ensco after its second-quarter results.

Transocean (RIG) released its second-quarter results yesterday after the markets closed. Let’s take a look.

As of June 30, Ensco (ESV) had a total contracted backlog of $2.3 billion—compared to $2.8 billion as of December 31, 2017.

In the first half of 2018, Ensco had negative cash flows from operations of $18 million—compared to its positive cash flow of ~$130.5 million the previous year.

Diamond Offshore released its second-quarter results today before the markets opened. Let’s take a look.

Transocean (RIG) is set to release its second-quarter results today after the markets close. Let’s see what analysts expect.

Ensco stock is finally trading in the green in 2018. As of July 24, Ensco has a YTD (year-to-date) return of 14.2%.

Transocean’s (RIG) ultra-deepwater semi-submersible GSF Development Driller I has secured an 11-well contract with Chevron (CVX) in Australia.

Active WTI crude oil futures decreased 1.0% to $70.46 per barrel from July 13 to July 20.

In Week 28, RBC Capital, BMO, Evercore, and Susquehanna revised target prices for offshore drilling companies.

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

In this part of our series, we’ll compare Wall Street analysts’ consensus ratings for the offshore drilling companies we’ve been analyzing.

Along with a company’s long-term solvency, it’s important to look at its liquidity position.

Offshore drilling (XLE) companies are capital-intensive, so looking at their financial leverage is very important. The debt-to-equity ratio and net debt-to-EBITDA ratio show these companies’ financial leverage.

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.

Toward the end of 2014, oil prices took a dip and the offshore drilling industry entered into a brutal downturn. Since then, offshore drilling companies have had a hard time securing contracts.

Baker Hughes, a GE company (BHGE), published its US crude oil rig count report on July 6, indicating that the US crude oil rig count rose by five last week to 863, its highest level since March 2015.

During the week ended July 6, US crude oil August futures and natural gas August futures fell 0.5% and 2.3%, respectively.

Seadrill (SDRL) stock fell to a 52-week low of $0.10 on July 2—a fall of 52.5% from the previous day’s closing price.

On June 21, Jefferies raised Transocean’s (RIG) target price to $15 and maintained a “buy” rating for the stock.

In May, the international offshore rig count was 198, up by four from 194 in April.

Yesterday, US crude oil surged 3.2% to close at $72.76 per barrel—the highest level since November 2014. Oil prices rose after a significant drop in US crude oil supplies.

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

On June 22, three offshore drilling stocks traded at unusually high volumes, which led to prices rising.

Transocean’s (RIG) estimated second-quarter revenues are $764.5 million—15% above the previous quarter and 7.5% higher YoY.

In the first quarter, Ensco’s EBITDA fell to $91.3 million from $98.4 million in the fourth quarter of 2017. The first-quarter EBITDA was 45.3% lower YoY.

As of March 31, Ensco (ESV) had a total contracted backlog of $2.7 billion—compared to $3.8 billion as of December 31, 2017.

The US offshore rig count in Week 24, which ended June 15, was 20, the same as the previous week.

In Week 4, which ended June 15, offshore drilling stocks fell along with oil prices ahead of OPEC ’s meeting scheduled for June 22.

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.

In the first quarter, Transocean’s (RIG) cash flow from operations dropped to $103 million from $244 million in the previous quarter.

Transocean’s drilling-to-revenue ratio fell to 64% in the first quarter from 66% in the previous quarter. In the first quarter of 2017, the ratio was also 46%.

In the first quarter, Seadrill Partners’ (SDLP) operating revenue fell to $194.3 million from $256.2 million in the previous quarter.

Last week, the US offshore rig count was at 19, the same as it was in the previous week.

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 […]

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

In the week ended May 11, Rowan Companies and Noble Corporation were the top-performing offshore drilling stocks. Each stock rose ~12%.

Ensco’s (ESV) drilling expenses were $325 million in the first quarter—up from $278 million in the first quarter of 2017.

As of March 31, Ensco (ESV) had a total contracted backlog of $2.7 billion—compared to $3.8 billion as of December 31, 2017.

On April 30, Wells Fargo reduced the target price for Ensco to $5 from $6. In week 17, Susquehanna reduced the target price for Ensco to $5 from $5.5.

In week 18, Ensco and Seadrill were the best performers among offshore drilling stocks. Diamond Offshore was the worst performer.

Rowan Companies’ (RDC) direct operating costs, excluding rebillable items, were $140 million in 1Q18, below its guidance of $150 million–$160 million.

Rowan Companies (RDC) has two main operating segments—Ultra-Deepwater Drillships and Jack-Up Drilling Rigs.

Of the 32 analysts covering Ensco (ESV), 44% recommend a “buy” or equivalent for the stock.

As of March 29, Ensco’s stock price has dropped 1.1% since the beginning of the month. The stock is trading 53.7% lower than its 52-week high.

None of the analysts revised their recommendation or target prices for offshore drilling stocks in week 12.

In 4Q17, Ensco’s EBITDA fell to $98.4 million from $149.5 million in 3Q17. The company’s EBITDA was 48% lower than its 4Q16 EBITDA of $190.0 million.

As of February 19, 2018, Transocean (RIG) had a backlog of $12.8 billion—up from $9.4 billion in October 2017.

On March 5, 2018, UBS reduced Rowan Companies’ target price to $17 from $18. On March 2, 2018, Wells Fargo cut the target price to $12 from $16.

As of December 31, 2017, Rowan Companies has long-term debt of $2.5 billion. The company doesn’t have any debt maturities in 2018.

In 4Q17, Rowan Companies’ (RDC) capital expenditure or capex was $22 million. The capex was lower than the previous estimate.

As of February 13, 2018, Rowan Companies (RDC) had a backlog of $456 million—down from $1.7 billion in February 2017.

Rowan Companies’ (RDC) direct operating costs were $166 million in 4Q17—above the previous guidance of $150 million–$160 million.

Rowan Companies’ total drilling revenue for 4Q17 was $296 million—1.7% higher than $291 million in 3Q17.

Rowan Companies had the worst YTD returns as of March 9, 2018. The stock has fallen 23.2% since the start of the year.

As of December 31, 2017, Ensco (ESV) had a total contracted backlog of $2.8 billion compared to $3.6 billion as of December 30, 2016.

Ensco expects its 1Q18 revenues to fall 8.0% quarter-over-quarter due to lower revenues from Ensco DS-7 and Ensco DS-6.

Ensco (ESV) has the highest number of jack-up rigs among its peers.

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

Seadrill Partners’ (SDLP) backlog was $1.5 billion on February 22, 2018. It fell from $1.7 billion in November 2017.

In 4Q17, Seadrill Partners’ (SDLP) total operating revenue fell to $256 million from $276 million in 3Q17.

In 2017, Transocean added two ultra-deepwater newbuild drillships—Deepwater Pontus and Deepwater Poseidon—to its fleet.

In 4Q17, Transocean’s (RIG) costs increased. With a fall in revenue, Transocean’s drilling-to-revenue ratio rose to 66% in 4Q17 from 46% in 3Q17.

As of February 19, 2018, Transocean (RIG) had a backlog of $12.8 billion—up from $9.4 billion in October 2017.

Analysts expect a fall in Rowan Companies’ (RDC) EBITDA (earnings before interest, tax, depreciation, and amortization).

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 […]

As of January 1, 2018, Diamond Offshore Drilling (DO) had a backlog of $2.4 billion—compared to $3.5 billion on January 1, 2017.

On February 13, UBS reduced the target price on Diamond Offshore to $20 from $22. Simmons reduced the target price to $9.35 from $10.

Diamond Offshore Drilling’s total 4Q17 drilling revenue was $338 million—a fall of almost 6% from $357 million in 3Q17.

Diamond Offshore Drilling’s (DO) total revenue fell 5.4% in 4Q17 to $346 million—compared to $366 million in 3Q17.

On February 9–16, upstream stocks Sanchez Energy and Chesapeake Energy were the first and fifth-largest losers on our list of energy stocks.

In December 2017, no drilling permits were issued in the Gulf of Mexico’s shallow waters. In November, one drilling permit was issued.

Natural gas rigs fell by one to 188 on January 19–26, 2018. US natural gas rigs were near the highest level since September 2017.

In this article, we’ll look at offshore drillers’ backlogs in comparison to their revenues.

Among the offshore drillers under our consideration in this series, Diamond Offshore Drilling (DO) has the highest credit rating by Moody’s at “Ba3.”

Offshore drilling (IYE) companies are capital intensive, so looking at their financial leverages is very important.

Offshore drillers have seen mixed returns on a year-to-date basis. The worst performer has been Rowan Companies, and the best performer has been Ensco.

Of the 33 analysts covering Rowan Companies (RDC), 30% recommend a “buy” or some equivalent for the stock, while 61% recommend a “hold.”

Of the 34 analysts covering Transocean, 44% recommend a “buy” or some equivalent for the stock, while 32% recommend a “hold.”

Of the 32 analysts covering Diamond Offshore Drilling (DO), only 9% recommend a “buy” or equivalent for the stock.

On January 24, 2018, Barclays revised its target prices for many offshore drilling stocks (XLE).

At the end of the third quarter, Noble Corporation’s backlog stood at $3.18 billion—down 1% from the previous quarter.

On January 18, 2018, Transocean announced that it concluded its shareholder meeting. Shareholders approved the acquisition of Songa Offshore.

March US crude oil (DBO) (UWT) futures contracts increased 1.8% to $65.61 per barrel on January 24, 2018.

Wells Fargo raised the target price for Transocean (RIG) to $11 from $9.5. Simmons and Cowen and Company raised Transocean’s target price to $11.

Of the 32 analysts covering Diamond Offshore (DO), only 9% recommend a “buy” or equivalent for the stock.

In the last week, crude oil prices have risen to a three-year high. Antigovernment protests in Iran and a blast of cold weather raised concerns about potential supply disruptions.

In the week ended January 5, 2018, Jefferies and Citigroup revised their target prices and recommendations for offshore drilling stocks.

In the week ended January 5, 2018, all offshore drilling stocks traded in the green. Noble Corporation (NE) was the best performer among its offshore drilling peers.

US crude oil rigs fell by five or 0.7% to 742 between December 29, 2017, and January 5, 2018. The rigs were near an eight-week low.

In this article, we’ll take a look at RBC Capital’s revised target prices for three offshore drillers (IYE).

Last week, Seadrill (SDRL) received another restructuring proposal. This time, the proposal was from Barclays, which holds Seadrill’s bonds.

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.

In November 2017, one drilling permit was issued in the shallow waters of the Gulf of Mexico.

On December 21, 2017, RBC revised the target prices for three offshore drillers.

On December 13, 2017, Moodys affirmed the “Caa2” rating on Seadrill Partners (SDLP) and changed the outlook to “stable” from “negative.”

In the week ending December 15, 2017, offshore drilling stocks had mixed returns. Seadrill was the best performer, while Ensco was the worst performer.

Approximately 29% of the analysts tracking Noble Corporation (NE) stock have recommended a “buy” or some equivalent as of December 13, 2017.

The consensus analyst rating for Diamond Offshore Drilling (DO) is 3.34, which means a “hold.” About 9% of the analysts have recommended a “buy” or some equivalent as of December 13, 2017.