Seadrill Ltd

Billionaire David Einhorn is prominent in the hedge fund industry for his bold investment strategies.

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).

Offshore drilling stocks had mixed returns in Week 30, which ended July 27. The best performer was Seadrill (SDRL).

Ensco’s second-quarter revenues were 2.45% higher than expected. The company’s EBITDA was 11.6% higher than the consensus estimates.

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

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

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.

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.

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 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.

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

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

Most of the offshore drilling stocks traded in the green in the week ended June 1, returning 3.0%–6.5%.

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%.

As of May 30, Transocean (RIG) stock had a good run in the last three months. The stock rose more than 37% during this period.

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.

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

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.

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

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

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

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.

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

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

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.

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

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.

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

In the seven calendar days to December 22, 2017, oilfield services company Seadrill (SDRL) was the largest loser.

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

On November 24–December 1, 2017, oilfield services stock Seadrill (SDRL) fell the most among energy stocks.

Between November 17 and November 24, 2017, oilfield services stock CARBO Ceramics (CRR) was the biggest gainer on our list of energy stocks.

Pacific Drilling (PACD) filed for Chapter 11 bankruptcy protection in an aim to restructure roughly $3 billion in debt.

Cost-cutting measures In 3Q17, Transocean (RIG) successfully reduced its costs. Despite a fall in revenue, Transocean’s drilling-to-revenue ratio fell to 46% in 3Q17 from 47% in 2Q17. In 3Q16, the ratio was also 46%. Drilling expenses in 3Q17 Transocean’s operating and maintenance expenses fell $10 million in 3Q17, to $323 million. Guidance In its 3Q17 conference […]

In 3Q17, Diamond Offshore Drilling’s (DO) drilling expenses rose 1% from the previous quarter and 6% from the prior year.

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.

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

Analysts expect Transocean’s (RIG) 3Q17 EBITDA to fall to $313 million—a 10% fall from $349 million reported in 2Q17 and a 31% fall year-over-year.

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.

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.

Seadrill (SDRL) filed for Chapter 11 bankruptcy protection in September. The company had applied for a “first-day” motion, and on September 13, it got approval from the court.

Even though all offshore drillers traded in the red this year, we’re still going to analyze the top five YTD returns of companies in the industry.

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.

Dominion Midstream Partners (DM) was the top MLP gainer in the week ending September 22, 2017. Dominion Midstream rose 12.1% during the week.

In its 2Q17 earnings conference, Whiting Petroleum lowered its capex for 2017 from $1.1 billion to $950 million. Its capex was ~$554 million in 2016.

Due to the brutal industry downturn, all offshore drilling (OIH) stocks have taken a hit. All stocks in the industry gave negative returns in 2016.

The offshore drilling industry experienced many events in the first half of September 2017. Seadrill (SDRL) filed for Chapter 11 bankruptcy.

Seadrill (SDRL) stock closed at $0.28 on September 13, 2017. The stock rose more than 20% in a single day.

On Friday, September 1, 2017, Seadrill (SDRL) stock soared 48.0% on the New York Stock Exchange and 158.0% in Oslo trading following a Bloomberg report.

In the week ended September 1, 2017, Seadrill (SDRL), which has fallen 91.0% since the start of the year, was the best performer, rising a whopping 43.0%.

Teekay Offshore Partners (TOO) was the top MLP loser last week, which ended September 1, 2017. It fell 6.3%.

As of June 30, 2017, Seadrill (SDRL) has a total interest-bearing debt of $9.3 billion, similar to the previous quarter.

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.

On August 24, 2017, Seadrill’s stock price fell to a new 52-week low of $0.15. The stock is down 94.4% from the start of the year as of August 29, 2017.

Between August 18 and 25, 2017, oilfield services stock Seadrill Limited (SDRL) was the largest loser among our list of energy stocks.

Seadrill (SDRL) plans to release its 2Q17 results on August 24. In 1Q17, Seadrill’s revenues totaled $569 million, nearly 14.6% lower than its 4Q16 revenues of $667 million.

Seadrill Partners will resume its dividend payments. It declared a quarterly cash dividend of $0.10 per share for the first and second quarter.

Seadrill Partners (SDLP) stock closed at $3.15 on August 17, 2017. The stock rose 17.9% in one day, which brought its YTD (year-to-date) return to -25%.

In 2Q17, Transocean (RIG) successfully reduced its costs. Despite a fall in its revenue, Transocean’s drilling-to-revenue ratio rose to 47% in 2Q17.

As of July 25, 2017, Transocean (RIG) had a backlog of $10.2 billion—compared to $10.8 billion in April 2017.

Transocean’s long-term view of the offshore drilling market, especially for the high-specification floaters, is positive.

Ensco’s (ESV) drilling expenses were $291 million in 2Q17, down from $350 million in 2Q16 but higher than the previous quarter’s $278 million.

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

Of the 28 analysts covering Ensco, three analysts gave “strong buy” recommendations, while eight analysts gave “buy” recommendations.

To cope with this brutal downturn, offshore drillers have taken various steps to curb their costs including reducing their workforce.

In the week ended June 30, 2017, Transocean and Diamond were the only two stocks among the offshore drillers to give positive returns.

According to Reuters, 23 analysts give recommendations on Atwood Oceanics. The stock has a consensus rating of three, which indicates a “hold.”

According to Reuters, two analysts recommended a “buy,” five analysts recommended a “sell,” and one analyst recommended a “strong sell” for Seadrill.

For the week ending June 23, 2017, oil prices fell below $45 per barrel. Oil prices touched $45 for the first time in 2017.

The land rig count is 128.0% or 510 higher than the rig count in the same period last year.

Last week (ended June 16), Atwood Oceanics was the worst-performing offshore drilling stock, while Rowan was the only stock among peers to see gains.

Last week Ensco (ESV) announced its decision to acquire Atwood Oceanics (ATW) in an all-equity transaction.

Most offshore drillers released their first quarter earnings in May.

In 2Q16, Seadrill Partners cut its quarterly dividends to $0.10 per share—equivalent to an annual distribution of $0.40.

According to data compiled by Thomas Reuters, Seadrill (SDRL) has a consensus rating of 3.5, which means a “hold.”

From 4Q16 and 1Q17, Seadrill’s (SDRL) vessel operating expenses fell $23 million to $211 million—a 10% fall.

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.

Until an increased consistency can be seen in an upward trend of oil prices, many oil companies will likely remain focused on conserving cash.

For Seadrill, two analysts recommended a “buy” and two recommended a “hold.” Five analysts recommended a “sell” and one recommended a “strong sell.”

Seadrill’s (SDRL) stock price fell more than 84% from the beginning of 2017 to May 18, 2017. The stock fell more than other offshore drillers.

Seadrill will release its 1Q17 results on May 24. In 4Q16, Seadrill’s revenue was $667 million—nearly 10% lower than revenue of $743 million in 3Q16.

On March 31, 2017, Atwood Oceanics (ATW) had a backlog of $400 million, which was ~60% lower than the $1 billion it reported on March 31, 2016.

Rowan Companies has agreed with Saudi Aramco to name the new joint venture ARO Drilling.

In its 1Q17 conference call, Rowan Companies (RDC) shared its outlook on the offshore drilling market.

Transocean (RIG) plans to release its 1Q17 results on May 3, 2017, after the market closes.

Rowan Companies (RDC) was the first among its peers to release its fleet status report this year.

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).

Wall Street analysts expect Seadrill’s (SDRL) 1Q17 EBITDA to be $272 million, down from $528 million in 1Q16 and $354 million in 4Q16. Seadrill’s EBITDA estimate for fiscal 2017 is $937 million.

Of the 35 analysts covering Ensco (ESV), three analysts gave “strong buy” recommendations, while eight analysts gave “buy” recommendations.

Bankruptcy protection does not mean liquidation, and the company is able to continue with its business operations.

On April 10, 2017, Seadrill had the highest implied volatility among the OFS (oilfield equipment and services) constituents of the VanEck Vectors Oil Services ETF (OIH).

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

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).

On March 14, 2017, Seadrill (SDRL) had the highest implied volatility among OFS companies that are part of OIH. Its implied volatility was 138.8%.

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