Is Pacific Maintaining Its Margins in a Falling Revenue Scenario?
Pacific Drilling’s (PACD) operating expense-to-revenue ratio stood at 37.5% at the end of 3Q16, similar to the previous quarter’s 37.3% and 3Q15’s 37.7%.
Pacific Drilling’s Future Revenues: Is Wall Street Overly Optimistic?
Wall Street analysts estimate revenues of $270 million in 3Q15 for Pacific Drilling (PACD)—close to the $274 million revenue earned in 2Q15.
What to Expect from Transocean’s 1Q17 Results
Transocean (RIG) plans to release its 1Q17 results on May 3, 2017, after the market closes.
Transocean: Aggressive in Rig Scrapping and Expansion
Many offshore drillers have scrapped their older rigs to reduce costs. Although scrapping rigs reduces costs, it also negatively impacts the earnings potential of the company.
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.
Seadrill’s 1Q17 Results: What Can Investors Expect?
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.
Transocean’s 3Q17 Earnings: What Analysts Expect
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.
Short Interest: Analyzing How It Impacts OFS Stocks
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).
Why Is Seadrill So Volatile?
On January 31, 2017, Seadrill (SDRL) had the highest implied volatility among the OFS (oilfield equipment and services) companies that are part of the VanEck Vectors Oil Services ETF (OIH).
Seadrill Stock Rose 98% in Week 20
The offshore drilling industry made headlines last week, especially Seadrill (SDRL), which reached a 52-week high of $0.73.
Seadrill’s Volatility Rose the Most among These OFS Stocks
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).
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.
What Do Analysts Expect from Ensco’s 3Q16 EBITDA?
Analysts expect a fall in Ensco’s (ESV) EBITDA for 3Q16. Analysts’ estimate for Ensco’s EBITDA in 3Q16 is $221 million—a 58% fall from $532 million in 2Q16.
What Do Wall Street Analysts Think about Transocean?
The Market has given a consensus rating of “sell” to Transocean (RIG). Of the 37 analysts covering the stock, only 5% have given it a “buy” recommendation.
Understanding Atwood Oceanics’ Future Revenues Through Backlog
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.
Recent Analyst Changes in Ensco’s Recommendations
Of the 28 analysts covering Ensco, three analysts gave “strong buy” recommendations, while eight analysts gave “buy” recommendations.
Are Seadrill’s 14 Newbuilds Still a Concern?
Seadrill (SDRL) still has 14 rigs under construction including four drillships, two semisubmersibles, and eight jack-ups.
Seadrill’s 2Q16 Results Are on Their Way
Seadrill’s 2Q16 results are expected to be released on August 25, 2016. The company’s stock has fallen 19% since the start of the year.
Week 50: Offshore Drilling Update
In the week ending December 15, 2017, offshore drilling stocks had mixed returns. Seadrill was the best performer, while Ensco was the worst performer.
Seadrill Makes an Important Announcement Before Its 2Q17 Results
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: 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.
Analyzing Ensco’s Acquisition of Atwood
Last week Ensco (ESV) announced its decision to acquire Atwood Oceanics (ATW) in an all-equity transaction.
Have Analysts Changed Their Recommendations for PACD after 3Q16?
After Pacific Drilling released its 3Q16 earnings, no Wall Street analysts either upgraded or downgraded its stock, unlike Diamond Offshore and Rowan Companies.
Rowan’s Take on Offshore Drilling after 1Q17
In its 1Q17 conference call, Rowan Companies (RDC) shared its outlook on the offshore drilling market.
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.
Last Week on Market Realist: Key Energy Industry Updates
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.
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.
OFS Stocks with High Short Interest: Do You Own Any of Them?
Currently, Diamond Offshore Drilling’s (DO) short interest-to-equity float ratio is 30.5%. It’s the highest among the OFS stocks that are part of OIH.
The 2010 Gulf Oil Spill Tragedy and Its Aftermath across the Industry
The marine oil spill in April 2010 was the worst environmental disaster in US history, causing millions of barrels of oil gushed into the Gulf.
Transocean and Atwood Were Best Performers among Peers Last Week
In the week ending September 29, 2017, almost all of the offshore drilling stocks traded in the green.
Ranking the Top 5 Offshore Drillers by 2017 Market Returns
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.
Bad News Continuesd for Offshore Drillers in August
August didn’t bring any good news for the offshore drilling industry. All stocks had negative returns, and no company predicted a turnaround, at least in the near term.
Transocean’s Backlog Offers a Picture of 2017 and 2018 Revenues
As of February, 2017, Transocean (RIG) had a backlog of $11.3 billion compared with $12.2 billion at the end of 3Q16.
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.
The Word on the Street: What Analysts Recommend for Transocean after 1Q16
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.”
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.
A must-know investor’s guide to off-shore driller Noble Corp. (NE)
Noble Corporation Plc. (NE) is one of the largest off-shore oil drilling companies in the world, owning the second-largest fleet of Mobile Offshore Drilling Units (or MODUs) in the industry.
Key Takeaways from Transocean’s 3Q15 Earnings and Conference Call
Transocean’s (RIG) revenue fell to $1.6 billion in 3Q15 from $1.8 billion in 2Q15. Its EBITDA also fell 13% to $655 million, from $755 million in the previous quarter.
Inside Rowan’s New JV with Saudi Aramco
Rowan Companies has agreed with Saudi Aramco to name the new joint venture ARO Drilling.
Transocean Secured New Contracts
As of July 25, 2017, Transocean (RIG) had a backlog of $10.2 billion—compared to $10.8 billion in April 2017.
Extracting the Basics: An Introduction to Offshore Drilling
Oil is one of the most important and most frequently traded commodities, and offshore drilling is an integral part of the oil industry.
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.
Why Do These OFS Stocks Look Weak?
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).
What Do Transocean’s Capex and Liquidity Forecasts Tell Us?
In 1Q16, Transocean (RIG) had cash flow from operations of $631 million, which was lower than the $960 million it had in 4Q15.
Seadrill: Why No ‘Buy’ Recommendations?
Majority recommends “sell” Currently, 28 analysts give recommendations on Seadrill (SDRL). Of these, none have given a “buy” recommendation on the stock. Six analysts have given a “hold” recommendation, and 22 have a “sell” recommendation. The consensus target price is $1.78, which implies a downside of 17%. Like Seadrill, Ocean Rig (ORIG) does not have […]
Why Short Traders Should Look at These Oilfield Services Stocks
Diamond Offshore Drilling’s short-interest-to-equity float ratio is currently 30.5%—the highest among the OFS stocks that are part of OIH.
Option Traders: Which OFS Stocks Should Investors Watch?
On February 21, 2017, Seadrill (SDRL) had the highest implied volatility among the OFS companies that are part of the VanEck Vectors Oil Services ETF (OIH).
Offshore Drilling Last Week: Stock Performance and Rig Count as of June 16
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.
Counting the Years: Drillers Must Deal with Aging Rigs
Older vessels are less fuel efficient and are costly to maintain. Insurance rates also increase with a rig’s age, increasing operating costs.
Inside Rowan Companies’ 4Q17 Earnings Estimate
Analysts expect a fall in Rowan Companies’ (RDC) EBITDA (earnings before interest, tax, depreciation, and amortization).
CARBO Ceramics Fell and Impacted Options Traders
In the last four quarters, CARBO Ceramics’ revenue fell 48.8%. Its adjusted operating loss was $27.8 million in 4Q16—compared to $32.3 million in 4Q15.
Pemex Terminates the Contract on West Pegasus with Seadrill
On August 22, Seadrill reported that it received a contract termination notice for its contract with Pemex Exploration Servicios on the rig West Pegasus.
Seadrill’s Updates: Orderbook, Contracts, and World Fleet
In its 1Q16 report, Seadrill (SDRL) provided insights on the industry orderbook.
Why These Oilfield Services Stocks Could Mean Trouble
High short interest in stocks such as Carbo Ceramics, Seadrill, and Noble could explain why they also have high implied volatilities.
Could These OFS Stocks Be a Concern for You?
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.
Analyzing Seadrill’s Stock Crash and Recent Events
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.
Another Offshore Driller Applied for Bankruptcy
Pacific Drilling (PACD) filed for Chapter 11 bankruptcy protection in an aim to restructure roughly $3 billion in debt.
Ocean Rig’s View of the Market, Bankruptcy Warning
With pressurized supply and demand conditions in the offshore drilling market, Ocean Rig does not see any recovery before 2020.
Which OFS Stocks Have the Highest Implied Volatility?
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%.
Offshore Drillers: How Their Backlogs Are Rapidly Declining
The offshore drilling industry has had low day rates and few or no new drilling contracts in the past year. Companies are alive mostly due to their earlier contracts.
Why Seadrill Stock Skyrocketed
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.
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%.
Transocean’s 2017 and 2018 Cost Guidance
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 […]
Oil Hit $50 for 1st Time in 2016: Will It Help Offshore Drillers?
For the first time in 2016, oil prices touched $50 per barrel on May 26.
Where Seadrill Sees Its Earnings in 4Q16
In 3Q16, Seadrill’s (SDRL) earnings before interest, tax, depreciation, and amortization fell to $441 million, compared to $557 million in 2Q16 and $546 million in 3Q15.
Seadrill: Investors and Analysts Wave Goodbye
According to Reuters, two analysts recommended a “buy,” five analysts recommended a “sell,” and one analyst recommended a “strong sell” for Seadrill.
Majority of Analysts Recommend a ‘Sell’ for Ocean Rig
Currently, 11 analysts give recommendations on Ocean Rig (ORIG). Of these, only one analyst, or 9%, has given the company a “buy” recommendation.
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.
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.
As Noble Takes Delivery of Newbuild, What About Free Cash Flow?
Noble’s capex requirement for 3Q16 is high with the delivery of its newbuild. So analysts expect free cash flow to be -$376 million in 3Q16.
What’s behind Oilfield Services Stocks’ High Implied Volatilities?
Tidewater has fallen 31.7% in the past year. It has the highest implied volatility of all the oilfield services companies that make up OIH.
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.
How Did Offshore Drilling Perform in December?
Offshore driller stocks have risen significantly in December 2016. In this series, we’ll see how oil prices rose after the OPEC deal and how this increase could affect the offshore drilling industry.
Diamond Offshore Drilling’s 3Q17 Revenue Rose 4.8% Year-over-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.
Seadrill Gets Contract Extension with Saudi Aramco
On December 29, 2016, Seadrill (SDRL) announced that it has secured a three-year contract extension from Saudi Aramco for its jackup AOD III.
What Do Analysts Expect for Seadrill Partners’ 1Q16 Earnings?
Seadrill Partners has beaten earnings estimates in the past four quarters. In 4Q15, SDLP’s reported EBITDA was 14% higher than estimates.
What Are Seadrill’s Restructuring Plans?
As of June 30, 2017, Seadrill (SDRL) has a total interest-bearing debt of $9.3 billion, similar to the previous quarter.
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.
Seadrill’s Efforts Should Push Its Debt Repayment to 1Q17
In 3Q16, Seadrill (SDRL) had cash flow from operations of $242 million, 20% lower than the previous quarter’s $303 million.
What Are Analysts’ Recommendations for Seadrill?
For Seadrill, two analysts recommended a “buy” and two recommended a “hold.” Five analysts recommended a “sell” and one recommended a “strong sell.”
Why Noble Corp.’s fleet structure is crucial to its business
Like many of its competitors, Noble possesses a diversified fleet of rigs that are best suited to different situations and environments.
Key Updates from Seadrill, Ensco, and Rowan Companies
To cope with this brutal downturn, offshore drillers have taken various steps to curb their costs including reducing their workforce.
Why geography and climate variation impact offshore drilling
The majority of offshore operations around the world occur in six key locations—the Gulf of Mexico, the Brazilian Coast, the West Coast of Africa, the North Sea, the Persian Gulf, and the Asia-Pacific region.
What’s the Next Big Move for David Einhorn?
Billionaire David Einhorn is prominent in the hedge fund industry for his bold investment strategies.
Why Ocean Rig stock is currently trading at a discount
The company currently trades for 6.9 times 2015 consensus EBITDA and $685 million per rig, which is a premium to its peers.
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).
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.
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.
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.
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.
Why Offshore Drilling Stocks Rose 7%–11% Yesterday
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, Offshore Drilling Stocks Rose on Volume Spike
On June 22, three offshore drilling stocks traded at unusually high volumes, which led to prices rising.
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 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 Stock Performance and Broad Equity Market Indexes
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.
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.