Noble Corp PLC

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

Noble Corporation’s (NE) contract drilling revenue was $354.0 million in 1Q17 compared to $591.0 million in the same period last year.

Now that Transocean has released its 4Q15 earnings, a whopping 56% of analysts have recommended a “sell.”

Tidewater’s (TDW) short interest-to-equity float ratio is 40.1%—the highest among the OFS stocks that are part of the VanEck Vectors Oil Services ETF (OIH).

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

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.

Noble (NE) has a consensus “hold” recommendation based on ratings from 39 analysts covering the stock, according to Bloomberg.

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.

For the next five years, Noble needs to pay around $200 million–$300 million in debt every year. Then, the repayment for each year rises to around $400 million or more.

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

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

Of the 38 analysts covering Transocean, 5% have given it a “buy” recommendation, while 32% have given it a “hold,” and 63% have recommended a “sell.”

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 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.

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

Diamond Offshore’s short-interest-to-equity float ratio is currently 40.7%—the highest among the OFS constituents of the VanEck Vectors Oil Services ETF (OIH).

In 1Q16, Transocean (RIG) had cash flow from operations of $631 million, which was lower than the $960 million it had in 4Q15.

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.

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

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

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 […]

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.

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

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.

US consumer confidence rose unexpectedly for the month of September. The index rose to 103 in September from 101.3 in August.

In the first three months of 2017, Ensco saw cash flows from operations of $104 million, as compared to $233 million in 1Q16.

High short interest in stocks such as Carbo Ceramics, Seadrill, and Noble could explain why they also have high implied volatilities.

CARBO Ceramics’ (CRR) short interest-to-equity float ratio is 28.6%—the highest among the OFS (oilfield equipment and services) stocks that are part of OIH.

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 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.

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.

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.

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 […]

Oilfield equipment and services companies like Baker Hughes (BHI) are affected by rig counts and energy prices. In the past year, West Texas Intermediate crude oil prices have dropped ~16%.

The past week saw one of the worst market performances in the US since the 2008 recession.

For Noble Corporation, 63% of total revenue comes from ultra-deepwater floaters. Also, 16% of revenue comes from deepwater floaters and 21% from jack-ups.

Like many of its competitors, Noble possesses a diversified fleet of rigs that are best suited to different situations and environments.

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

Ensco’s (ESV) revenue from continuing operations was $909 million in 2Q16, a 12% increase from 1Q16. Revenues exceeded the company’s guidance.

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

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

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

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

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.

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.

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

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.

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 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.

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.

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.

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

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.

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

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.

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.

On September 8–15, 2017, upstream company Whiting Petroleum (WLL) outperformed the energy sector stocks.

As the chart below shows, Seadrill’s (SDRL) vessel operating expenses fell $22 million from $243 million in 2Q16 to $226 million in 2Q17.

A company’s backlog helps gauge its future revenue. On August 24, 2017, Seadrill (SDRL) had a backlog of $3.1 billion.

In this article, we’ll look at the recent changes analysts have made to Diamond Offshore Drilling’s target prices and recommendations.

The estimated decline in Noble’s revenue is mostly due to poor industry conditions and the company’s comparatively weak backlog.

On May 24, 2017, Seadrill (SDRL) had a backlog of $3.4 billion, which is higher than its backlog of $2.5 billion on February 28.

In the previous part of this series, we saw that President Donald Trump is preparing an executive order that will open new areas of the Arctic and Atlantic oceans to oil and gas drilling.

Leverage During this downturn, it’s very important to determine whether Diamond Offshore Drilling (DO) is in a position to pay off its short-term and long-term debt with its operational cash flow. A company failing to do so has a higher chance of declaring bankruptcy. Leverage magnifies risk in a sluggish market. We’ll examine Diamond Offshore’s financial […]

Noble Energy (NE) is scheduled to release its 4Q16 results after the market closes on February 9, 2017. A conference call will follow on February 10, 2017.

In 3Q16, Seadrill’s revenue was $743 million, nearly 14% lower than its revenue of $868 million in 2Q16 and 25% lower than its revenue of $985 million in 3Q15.

In this article, we’ll examine Seadrill’s (SDRL) 3Q16 conference call insights regarding the current developments in the offshore drilling (OIH) space.

For the first nine months of 2016, Diamond Offshore (DO) had a cash flow from operations of $491 million, compared to $466 million in the same period last year.

Wall Street analysts estimate revenue of just over $870 million in 3Q16 for Transocean (RIG). It would be a steep fall from revenue of $943 million in 2Q16.

Southern Company (SO) has the lowest implied volatility figure of all the utility companies. Its YTD returns are 11.6%. Its five-day returns are 2.5%.

The utilization rate is an important indicator to gauge demand and activity in the offshore drilling industry. A rising utilization rate hints at positive performance.

As of August 24, 2016, Seadrill (SDRL) had a backlog of $3.6 billion compared to $4.3 billion in the previous quarter.

Transocean’s (RIG) drilling revenue for 2Q16 was $918 million, nearly 17% lower than $1.1 billion in the previous quarter and 48% lower than the $1.8 billion in revenue in 2Q15.

In 2Q16, Noble Corporation (NE) had a cash flow from operations of $862 million, compared to $175 million in 1Q16 and $767 million in 2Q15.

Diamond Offshore Drilling cold stacked one rig in 1Q16. This brings the company’s total cold stacked rigs to 15%–50% of the total fleet.