Noble Corp PLC

Last week, oilfield services stock Noble (NE) fell the most among the stocks in the energy space. Other oilfield services stocks Ensco (ESV), Superior Energy Services (SPN), and Nabors Industries (NBR) had the second, third, and fourth largest declines among energy stocks, respectively, last week.

On November 30–December 7, Superior Energy Services (SPN) fell the most on our list of energy stocks.

Between September 14 and 21, upstream stock Southwestern Energy Company (SWN) gained the most on our list of energy stocks.

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.

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

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.

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.

Analysts’ consensus rating for Noble is 3.2 on a scale of 1 (“strong buy”) to 5 (“strong sell”), meaning “hold.”

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

According to Noble’s latest fleet status report, the company has secured two contracts and one contract extension for its jackup rigs.

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

Baker Hughes reported that US natural gas rigs rose by two to 189 on July 6–13—the highest level since June 15.

Baker Hughes reported that US crude oil rigs were flat at 863 on July 6–13. The rigs have risen by 98 or ~12.8% year-over-year.

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

Earlier in this series, we analyzed and compared the business fundamentals of different offshore drilling companies. Now we’ll look at the technical indicators for these offshore drillers (XLE).

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.

On July 6–13, upstream stock Sanchez Energy (SN) saw the highest gain on our list of energy stocks.

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.

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

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.

Baker Hughes reported that the US natural gas rig count fell by four to 194 on June 8–15—the lowest level since April 13.

On June 8–15, Whiting Petroleum (WLL) and California Resources (CRC) fell the most on our list of energy stocks.

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.

Research conducted here at VanEck has identified that oil price and the S&P 500 Index can be used to explain most of the performance of oil services stocks historically.

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

Even after week 21’s fall in stock price, Seadrill still has a whopping 82.8% year-to-date return as of May 25.

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 this series, we’ll discuss analysts’ ratings and recommendations for offshore drillers.

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

According to Noble Corporation’s latest fleet status report, the company has secured two new contracts.

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.

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

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.

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’ 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.

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.

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 […]

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.

As of December 31, 2017, Diamond Offshore had long-term debt of $1.97 billion—compared to $1.98 billion in the previous year.

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

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

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.”

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.

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.

Noble (NE) was the third-best performer among top offshore drillers in terms of market returns in 2017.

Of the 32 analysts covering Ensco, 47% recommend a “buy” or some equivalent for ESV 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.

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.

On December 21, 2017, Transocean (RIG) announced that it had secured a 22-well contract for its harsh environment semisubmersible, the Transocean Spitsbergen, with Statoil.

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

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.

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.

Noble Corporation (NE) is the third-best-performing stock among its peers, behind Diamond Offshore Drilling (DO) and Rowan Companies (RDC).

Rowan Companies’ (RDC) year-to-date return was -22.6% as of December 12, 2017. The stock has underperformed its peer Diamond Offshore Drilling (DO).

Diamond Offshore Drilling’s (DO) YTD (year-to-date) returns were -3.5% as of December 12, 2017.

On November 24–December 1, 2017, Cobalt International Energy (CIE) rose the most among energy stocks.

In 3Q17, Seadrill Partners’ (SDLP) operating revenue rose to $277 million from $268 million in 2Q17 after falling for the last five quarters.

The US offshore rig count for the week ending November 17, 2017, was 21—three higher than the previous week.

In the week ending November 10, 2017, analysts revised target prices for Transocean (RIG), Rowan Companies (RDC), and Noble (NE).

Cash flow Operating cash flow represents cash flow from a company’s core operations. In 3Q17, Transocean’s (RIG) cash flow from operations rose to $384 million from $319 million in the previous quarter. Capital expenditure Transocean’s capex stood at $128 million in 3Q17. The expenditure was mainly related to the company’s contracted newbuild drillships. In 2Q17, its capex was $136 million. In […]

Transocean’s top line In 3Q17, Transocean’s (RIG) drilling revenue was $699 million, just 0.8% lower than its revenue of $705 million in the previous quarter, and 21% lower than the $886 million seen in 3Q16. Revenue sources Transocean earns its revenue mainly through floaters. The company sold its jack-up fleet to Borr Drilling in March 2017. […]

For the first nine months of 2017, Diamond Offshore incurred $100 million in capex (capital expenditure), mainly related to rig equipment and replacements.

Diamond Offshore Drilling’s (DO) 3Q17 revenue was $366 million, a fall of almost 8.2% from $399 million in 2Q17 and a 4.8% rise year-over-year.

Diamond Offshore Drilling’s (DO) revenue fell 8% in 3Q17 to $366 million, compared with $399 million in the previous quarter. Its adjusted EBITDA also fell quarter-over-quarter.

Oil prices are above $60 per barrel after almost two years. On October 30, Brent crude oil prices were $60.10 per barrel.

Of the 35 analysts, one analyst gave Transocean a “strong buy,” 11 analysts gave a “buy” recommendation, and 15 analysts gave a “hold” recommendation.

For Transocean, analysts project revenue of just over $701 million in 3Q17—a 1.4% fall from its revenue of $711 million in 2Q17 and a 22.3% fall YoY.

Ensco’s (ESV) estimated $457 million in revenues in 3Q17 would be a 16.6% fall year-over-year, similar to 2Q17 revenue of $457 million.

Previously in this series, we saw that most analysts rate Diamond Offshore Drilling (DO) a “hold.” In this part of our series, we’ll see how analysts view Diamond Offshore Drilling’s 3Q17 revenues and EBITDA.

Diamond Offshore (DO) closed at $14.47 on October 12. Over the last month, DO’s stock has had a good run with a 16.3% return.

The uncertainty hovering around the Ensco-Atwood Oceanics merger for more than four months has at last come to a halt.

Jefferies raised the target price for Rowan Companies (RDC) to $13 and maintained a “hold” rating.

In the week ending September 29, 2017, almost all of the offshore drilling stocks traded in the green.

The fate of the offshore drilling industry is closely tied to oil prices.