Top Energy Losses Last Week
On June 8–15, Whiting Petroleum (WLL) and California Resources (CRC) fell the most on our list of energy stocks.
Noble Corporation: Optimistic about Offshore Drilling Outlook
Noble Corporation’s (NE) contract drilling revenue was $354.0 million in 1Q17 compared to $591.0 million in the same period last year.
Analyzing Rowan’s Rig Scrapping and Stacking Activity in 3Q15
Offshore drilling (XLE) (IYE) is a capital-intensive industry requiring a large amount of money to keep rigs active and well-maintained.
US Offshore Rig Count Was Steady in the September 18 Week
In the week ending September 18, 2015, the US offshore rig count didn’t change. The offshore rig counts have averaged 33 over the past eight weeks.
Energy Stocks: Biggest Losses Last Week
In the week ending May 24, oilfield services stock Nabors Industries (NBR) fell the most among the stocks in the energy space.
No Drilling Permits in the Gulf of Mexico in May
In May, no drilling permits were issued in the shallow waters of the Gulf of Mexico. In the first five months of 2018, only two were issued.
How Has Market Sentiment Changed for Noble?
Noble (NE) has a consensus “hold” recommendation based on ratings from 39 analysts covering the stock, according to Bloomberg.
Prepping for Noble Corporation’s 2Q17 Results
Noble Corporation plans to release its 2Q17 results on August 3, 2017, after the markets close. It will have a conference call on August 4, 2017.
Seadrill: Best Performer among Peers Last Week
Offshore drilling stocks had mixed returns in Week 30, which ended July 27. The best performer was Seadrill (SDRL).
How Offshore Drilling Stocks Performed Last Week
Most offshore drilling stocks traded in the green in the week ended July 13. The best performer during the week was Noble.
Halliburton’s Share Price Drops after Fiscal 4Q15 Earnings Release
Halliburton’s share price reacted negatively after its fiscal 4Q15 earnings release, falling by 3.9% to $29.28 on the day compared to the day before.
Estimates and Recommendations for Ensco ahead of 1Q18 Earnings
Of the 32 analysts covering Ensco (ESV), 44% recommend a “buy” or equivalent for the stock.
Transocean’s Cost Guidance for 1Q18 and 2018
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.
A Review of Floaters and Jack-Up Fleets for Offshore Drillers
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.
OPEC’s Crude Oil Production Rose in June
On July 2, a Reuters survey showed that OPEC’s crude oil production increased by 320,000 bpd (barrels per day) to 32,320,000 bpd in June.
What Happened in September in the Offshore Drilling Space?
The offshore drilling industry experienced many events in the first half of September 2017. Seadrill (SDRL) filed for Chapter 11 bankruptcy.
Saudi Arabia’s Crude Oil Production Could Hit a New Record
Reuters estimates that Saudi Arabia’s crude oil production increased by 700,000 bpd to 10,700,000 bpd in June—compared to the previous month.
How to Interpret Valuation Multiples in the Offshore Drilling Industry
Offshore drilling companies are capital-intensive and have varying degrees of financial leverage. Thus, we use the EV-to-EBITDA multiple as a valuation.
Ensco’s 4Q17 Earnings Compared to Transocean and Diamond Offshore
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.
Seadrill Stock Fell 32% in Week 21
Even after week 21’s fall in stock price, Seadrill still has a whopping 82.8% year-to-date return as of May 25.
Which Rig Type Has Been Performing Best for Transocean?
Transocean’s drilling revenue for 1Q16 was $1.34 billion, ~28% lower than the $1.85 billion in 4Q15 and 34% lower than the $2 billion in revenue in 1Q15.
Is the Customer the King in Offshore Drilling?
The bargaining power of offshore drilling customers is influenced by oil prices and utilization rates. When oil prices are high, rig capacity goes down.
Analysts Upgrade WTI and Brent Crude Oil Price Forecasts
WTI crude oil futures increased ~8.6% on June 25–July 2. Expectations of a drop in US crude oil inventories could support oil prices.
Upstream and Oilfield Services Stock Fell Last Week
On December 7–14, upstream stock Carrizo Oil & Gas (CRZO) fell the most on our list of energy stocks.
Jefferies Revises Target Prices for Diamond Offshore, Noble
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 […]
Will Crude Oil Futures and S&P 500 Move in the Same Direction?
February US crude oil (UWT) (USL) futures contracts rose 0.5% to $61.73 per barrel on January 8. Prices are near the highest level since December 2014.
Is President Trump Helping Crude Oil Bulls or Bears?
WTI crude oil prices fell 8.2% on June 29–July 17. August WTI oil futures contracts rose 0.03% to $68.08 per barrel on July 17.
Highlights from Ensco’s July Fleet Status Report
Ensco (ESV) released its quarterly fleet status report on July 19. Ensco 8503 secured a 100-day contract with Talos Energy in the US Gulf of Mexico.
Oilfield Services Stocks: How Implied Volatilities Track Returns
As of May 1, 2017, Tidewater (TDW) has fallen 90% in the past year.
US Market Buoyant with Rise in Consumer Confidence
US consumer confidence rose unexpectedly for the month of September. The index rose to 103 in September from 101.3 in August.
Understanding Ensco’s Capital Expenditure Plans
In the first three months of 2017, Ensco saw cash flows from operations of $104 million, as compared to $233 million in 1Q16.
Rowan Companies’ 1Q18 Cost Guidance
Rowan Companies’ (RDC) direct operating costs were $166 million in 4Q17—above the previous guidance of $150 million–$160 million.
Analysts Love Ensco: A Closer Look
In this series, we’ll discuss analysts’ ratings and recommendations for offshore drillers.
Transocean’s Second-Quarter and 2018 Cost Guidance
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%.
Sharp Fall in Crude Oil Pulled UK Inflation Down to 0
The ONS stated on Tuesday, September 15, that the annual inflation rate fell back to zero in August. The lower fuel prices are one of the reasons behind it.
How Did Rowan’s Top Line Perform in 2Q16?
Rowan’s jack-up revenue in 2Q16 fell to $264 million, from $272 million in 1Q16. Its jack-up fleet had 108 higher operating days, but the average day rate declined.
Inside Transocean’s Outlook after 1Q16
Transocean does not expect to see a recovery in rig activity before 2017 as customer budgets have been set for 2016 and are unlikely to improve soon.
Improper Stacking Can Weigh Negatively on Noble Corporation
Cold-stacking rigs reduces costs much more than warm-stacking them. Noble Corporation (NE) seems to be quite reluctant to cold-stack its idle rigs.
Must-Know Relative Valuation for Offshore Companies
In terms of relative valuation, Rowan Companies (RDC) is currently trading at a 5.12 forward EV-to-EBITDA multiple as compared to the median industry multiple of 5.88.
Jack-Ups, Floaters among Seadrill’s Revenue Drivers
In 2Q16, almost 70% of Seadrill’s total revenue came from the floater segment.
This segment’s revenue for fiscal 2Q16 was $610 million.
Will Pacific Drilling’s Investors Have Positive Free Cash Flow after 4Q15?
Analysts estimate that Pacific Drilling will have a free cash flow of -$16 million in the 2H15, compared to the $106 million it had in the 1H15.
Analyst Estimates for Seadrill’s 3Q16 Earnings
Earnings estimates As we saw in the previous part, Wall Street analysts estimate Seadrill’s 3Q16 revenue will be 17% lower than the previous quarter’s revenue. However, analysts expect a 30% drop in its 3Q16 EBITDA (earnings before interest, tax, depreciation, and amortization). Analysts estimate Seadrill’s EBITDA will be $392 million in 3Q16, compared with $557 […]
What Are Ensco’s Capex Plans for Newbuilds through 2019?
In the first half of 2016, Ensco (ESV) had cash flow from operations of $800 million compared to $891 million in the same period last year.
US Offshore Rig Count Rose Again Last Week
In the week ending October 16, 2015, one US offshore rig was added to the previous week’s total, taking the count to 33 rigs.
Must-know: Ocean Rig stock could double over the next year
I believe this stock could double over the next year from $20 to $40 as it’s rerated due to the lucrative MLP structure.
Will Diamond Offshore’s Financial Health Further Deteriorate?
Due to the deteriorating leverage and liquidity position, Standard & Poors lowered Diamond Offshore’s credit rating from A- to BBB+ in April 2015.
How Ensco’s Segments Performed in 2Q16
Ensco’s (ESV) revenue from continuing operations was $909 million in 2Q16, a 12% increase from 1Q16. Revenues exceeded the company’s guidance.
Midstream Stocks Outperformed the Energy Space Last Week
Last week (ended July 5), midstream stock EnLink Midstream LLC (ENLC) outperformed the energy space. Here’s a summary of midstream stocks’ performance.
Top Gains in the Energy Sector Last Week
In the week ending on April 26, upstream stock Anadarko Petroleum (APC) rose the most among the stocks in the energy space.
Jefferies and Susquehanna Revised Target Prices for Ensco
In Week 30, which ended on July 27, analysts revised their target prices for Ensco after its second-quarter results.
US Offshore Rig Count Fell by Two in Week 30
The US offshore rig count in Week 30, which ended July 27, was 16, one less than the previous week and eight less YoY (year-over-year).
Transocean’s New Contracts with ConocoPhillips and Chevron
Transocean’s (RIG) ultra-deepwater semi-submersible GSF Development Driller I has secured an 11-well contract with Chevron (CVX) in Australia.
Noble Secures Contract with Encana and Total
According to Noble’s latest fleet status report, the company has secured two contracts and one contract extension for its jackup rigs.
Must-Know Highlights from Transocean’s Q2 2018 Results
Transocean (RIG) released its second-quarter results yesterday after the markets closed. Let’s take a look.
Ensco’s Capex Guidance for the Second Half of 2018
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.
Analyzing Ensco’s Backlog and Contracts
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.
Ensco Stock Rose 6% after Its Second-Quarter Results
Ensco’s second-quarter revenues were 2.45% higher than expected. The company’s EBITDA was 11.6% higher than the consensus estimates.
Why Diamond Offshore Stock Rose More than 5% this Morning
Diamond Offshore released its second-quarter results today before the markets opened. Let’s take a look.
What You Need to Know before Transocean’s Q2 2018 Earnings
Transocean (RIG) is set to release its second-quarter results today after the markets close. Let’s see what analysts expect.
Offshore Drilling Rig Count and Stocks Fell in Week 29
In Week 29, which ended on July 20, all offshore drilling stocks traded in the red. Seadrill (SDRL) fell the most.
How Analysts Rate Noble, Pre-Q2 2018 Results
Analysts’ consensus rating for Noble is 3.2 on a scale of 1 (“strong buy”) to 5 (“strong sell”), meaning “hold.”
Four Analysts Revised Target Prices for Offshore Drilling Companies
In Week 28, RBC Capital, BMO, Evercore, and Susquehanna revised target prices for offshore drilling companies.
Diamond Offshore Has the Most ‘Sell’ Ratings among Peers
In this part of our series, we’ll compare Wall Street analysts’ consensus ratings for the offshore drilling companies we’ve been analyzing.
Comparing Offshore Drilling Companies’ Dividend Yields
Dividend yield indicates how much a company pays in dividends relative to its share price. It’s calculated as the dollar value of dividends as a percentage of the stock price.
Which Offshore Drillers Have the Highest and Lowest Leverage?
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.
Transocean Has the Highest Backlog among Its Peers
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.
Transocean: The Lowest Drop in Backlog among Peers
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.
Why Seadrill Stock Fell 52% on July 2
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.
A Close Look at the International Offshore Rig Count
In May, the international offshore rig count was 198, up by four from 194 in April.
Jefferies Revises Ratings and Target Prices for Offshore Drillers
In Week 25, which ended June 22, Jefferies downgraded one offshore driller and revised the target prices for others.
On June 22, Offshore Drilling Stocks Rose on Volume Spike
On June 22, three offshore drilling stocks traded at unusually high volumes, which led to prices rising.
Offshore Drillers: Analysts’ Second-Quarter Revenue Estimates
Transocean’s (RIG) estimated second-quarter revenues are $764.5 million—15% above the previous quarter and 7.5% higher YoY.
Analyzing Offshore Drilling Companies’ First-Quarter EBITDA
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.
Comparing Ensco’s Backlog with Transocean and Diamond Offshore
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.
All Offshore Tanker Stocks Fell in Week 24
In Week 4, which ended June 15, offshore drilling stocks fell along with oil prices ahead of OPEC ’s meeting scheduled for June 22.
Week 24: Where Was the US Offshore Rig Count Headed?
The US offshore rig count in Week 24, which ended June 15, was 20, the same as the previous week.
Analyzing Noble’s June Fleet Status Report
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.
Week 22: Offshore Rig Count Is Flat from the Previous Week
Most of the offshore drilling stocks traded in the green in the week ended June 1, returning 3.0%–6.5%.
Transocean’s Second-Quarter and 2018 Capex Guidance
In the first quarter, Transocean’s (RIG) cash flow from operations dropped to $103 million from $244 million in the previous quarter.
Week 21: Offshore Rig Count Is Flat Compared to Previous Week
Last week, the US offshore rig count was at 19, the same as it was in the previous week.
Analysts’ Revisions for Ensco and Rowan Companies
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.
Last Week’s Biggest Losses among Energy Stocks
Between April 20 and April 27, oilfield services stock Ensco (ESV) fell the most on our list of energy stocks.
Analysts’ Revisions for Offshore Drilling Stocks
None of the analysts revised their recommendation or target prices for offshore drilling stocks in week 12.
Which Offshore Drilling Company’s Backlog Rose from 4Q17?
As of February 19, 2018, Transocean (RIG) had a backlog of $12.8 billion—up from $9.4 billion in October 2017.
Why 7 Analysts Revised Rowan Companies’ Target Price
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.
Rowan Companies: Fighting the Downturn
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.
Rowan Companies’ Provided Its 2018 Capex Guidance
In 4Q17, Rowan Companies’ (RDC) capital expenditure or capex was $22 million. The capex was lower than the previous estimate.
Rowan Companies: Analyzing Its 4Q17 Revenue
Rowan Companies’ total drilling revenue for 4Q17 was $296 million—1.7% higher than $291 million in 3Q17.
Week 10: Offshore Drilling Industry Update
Rowan Companies had the worst YTD returns as of March 9, 2018. The stock has fallen 23.2% since the start of the year.
Which Energy Stocks Fell More than the Oil Market Last Week?
On February 23–March 2, 2018, upstream stock California Resources (CRC) was the largest loser on our list of energy stocks.
A Detailed Look at Ensco’s Backlog
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.
Drilling into Ensco’s 4Q17 Revenues and Expectations for 1Q18
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’s Views on the Jack-Up and Floater Segments
Ensco (ESV) has the highest number of jack-up rigs among its peers.
Transocean’s Fleet: Rig Additions and Subtractions in 2017
In 2017, Transocean added two ultra-deepwater newbuild drillships—Deepwater Pontus and Deepwater Poseidon—to its fleet.
A Look at Seadrill Partners’ Cost Performance in 4Q17
Seadrill Partners’ (SDLP) vessel and rig operating expenses fell 3% to $94 million in 4Q17 compared to $96.9 million in 3Q17.
How Diamond Offshore’s Debt Profile Stands after 4Q17
As of December 31, 2017, Diamond Offshore had long-term debt of $1.97 billion—compared to $1.98 billion in the previous year.
Shallow Water Drilling Permits Rose, Deepwater Permits Fell
In December 2017, no drilling permits were issued in the Gulf of Mexico’s shallow waters. In November, one drilling permit was issued.
The Only 2 Offshore Drillers That Still Pay Dividends
Slumping oil prices have put offshore drillers (IYE) under financial pressure. The first victim of this pressure has been dividends.
Comparing Offshore Drillers’ Leverages
Offshore drilling (IYE) companies are capital intensive, so looking at their financial leverages is very important.
The Offshore Drillers with the Highest and Lowest Credit Ratings
Among the offshore drillers under our consideration in this series, Diamond Offshore Drilling (DO) has the highest credit rating by Moody’s at “Ba3.”