Rowan Companies PLC

Between January 18 and January 25, oilfield services stock Weatherford International rose the most among the energy stocks under review in this series.

On December 7–14, upstream stock Carrizo Oil & Gas (CRZO) fell the most on our list of energy stocks.

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.

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 (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.

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 (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.

In Week 29, which ended on July 20, all offshore drilling stocks traded in the red. Seadrill (SDRL) fell the most.

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

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.

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.

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

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.

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

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.

US gasoline futures rose 0.6% to $2.13 per gallon on July 5 due to the larger-than-expected drop in gasoline inventories.

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.

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.

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.

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 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.

Seadrill Partners’ (SDLP) backlog was $1.3 billion on May 24. It fell from $1.5 billion in February.

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

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 […]

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

Seadrill stock has skyrocketed. On May 17, the stock rose 26.1% and reached $0.58. The company’s volume increased to 69.3 million shares.

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

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.

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.

Between April 20 and April 27, oilfield services stock Ensco (ESV) fell the most on our list of energy stocks.

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.

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.

On February 23–March 2, 2018, upstream stock California Resources (CRC) was the largest loser on our list of energy stocks.

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

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.

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.

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

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.”

Slumping oil prices have put offshore drillers (IYE) under financial pressure. The first victim of this pressure has been dividends.

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

Offshore (OIH) exploration and development wells are drilled with the use of rigs. Rigs come in various sizes and with various characteristics.

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.

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

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.

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.

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

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.

The US offshore rig count stood at 19 in the week ended December 22, 2017.

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.

Among offshore drilling stocks, Ensco (ESV) is the fifth-best-performing stock in 2017. It had a YTD (year-to-date) return of -42.5% as of December 12, 2017.