Ensco: Fleet Status As Of February 16, 2016, And Commentary

| About: Ensco PLC (ESV)

Summary

Ensco released its February fleet status on February 17, 2016. I noticed a few changes.

The Ensco Ds-5 contract has been voided by Petrobras. The JU Ensco 123 under-construction has been delayed 19 months until Q1'18.

5 small contracts and one extension and two long-term contracts for the Ensco 92 and Ensco 75.

ESV will remain weak in 2016, but will survive this terrible bear cycle. A prudent accumulation could pay off ultimately in 2017-2018?

Click to enlarge

Picture: Ensco DS-3

Ensco PLC (NYSE:ESV)

This article is an update of my preceding article on ESV on October 20, 2015, about the October FSR.

[I] Fleet Status as of February 16, 2016.

1. Drillships

# Name

Year

Built

Water Depth Max

K feet

Contract

End

Day rate

K $

Location

Info

0-rate

1

Ensco DS-3

2010

10/12 6/16 475

[BP]

U.S. GOM

+ cost adjustment
2

Ensco DS-5

2011

10/12 7/16

Contract Void

Dispute 1/16

[Petrobras]

US GOM

3

Ensco DS-6

2011

10/12 2/18

548 366

+102 for upgrade/amort.

366 (From 9/15 to ?)

[BP]

Angola

(Customer has delivered notice to place rig on special
standby rate of low 360s beginning late Sep. 15.)

2x1Y option

4

Ensco DS-7

2013

10/12

11/17

585k +19k

[Total]

Angola

1Y option
5

Ensco DS-8

2014

10/12

11/20

From $610k to $655k (+ $26 million in mob.)

[Total]

Angola

1 Y option
6

Ensco DS-10

2015

10/12

under constr.

deferred by 18 months

Q1' 17

Available

- -
Click to enlarge

2. Semi-Submersibles

# Name

Year

Built

Upg.

Water

Depth

Max

K feet

Contract

End

Day rate

K $

Location

Info.

0-rate

1

Ensco 8503

2010

8.5/10

7/17

352

[Stone Energy]

U.S. GOM

2

Ensco 8504

2011

8.5/10 Late 3/16 - Early 7/16 272

[Chevron]

N/A

3

Ensco 8505

2012

8.5/10

1/18

150-210

[Marubani]

U.S. GOM

4

Ensco 6001

2000

5.7 6/18

345

+20 amort.

[Petrobras] Brazil
5

Ensco 6002

2001

5.7

Upgrade shipyard 46d total (Q3'15)

7/18

345 (+25 amort.)

[Petrobras] Brazil

Bonus 15% possible

6

Ensco 6003

2004

5.7 1/17 315 [Petrobras] Brazil

Bonus possible 15%

7

Ensco 6004

2004

5.7 10/16 315 [Petrobras] Brazil Bonus possible 15%
8

Ensco 5004

1982

1.5

1/17

298

+26 For mob. and upgrade

[Mellitha] Mediterranee

10

Ensco 5005

1982

1997

1.5 Late 2/16 115

[Petronas Carigali]

Brunei

10

Ensco 5006

1998/1999

7.5

5/18

475

[Inpex] Australia

Upgrade +206k/d amortized on contract duration

Click to enlarge

3. Jackups

# Name

Year

Built

Upg

Water Depth Max

K feet

Contract

End

Day rate Location Info.
1

Ensco 141

2016

Cap. 400' Under-construction Q3 '16 UAE -
2

Ensco 140

2016

Cap. 400' Under-construction Q2 '16 UAE -
3

Ensco 123

2016

Ultra-Premium Harsh Environment Water Depth Max: 400'

Under-construction

Delayed 19-month

Q2 '16

1Q'18

Singapore -
4

Ensco 122

2014

Ultra-Premium Harsh Environment Water Depth Max: 400'

11/16

232

+14 for mob. and upgrade

[NAM]

Nz

2x1Y priced option
5

Ensco 121

2013

Ultra-Premium Harsh Environment Water Depth Max: 400' 6/16

232

+10

[Wintershall]

Nz

(14d) 2Q'16

+1Y unpriced option

6

Ensco 120

2013

Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'

5/16

5/16-8/16 (4-wells extension)

235

+13 until 11/15

182 +11

[Nexen]

U.K.

(14d)2Q'16

+ 2x1 well opt.

+ 5x 1 well unpriced opt.

7

Ensco 110

2015

Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'

5/18

115

[NDC]

UAE

2x1Y unpriced opt.
8

Ensco 109

2008

Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'

2/18

172

+13 for mob.

[Chevron]

Angola

(30d) 2Q'16
9

Ensco 108

2007

High Specification, HPHT Capable Water Depth Max: 400' 4/17 162

[PTTEP]

Thailand

1Y option
10

Ensco 107

2006

High Specification, HPHT Capable Water Depth Max: 400' 2/16 132 +30

[STOS]

New Zealand

1 well priced opt.
11

Ensco 104

2002

2011

High Specification, HPHT Capable Water Depth Max: 400'

9/18

95

[NDC]

UAE
2-year unpriced option
12

Ensco 102

2002

High Specification, HPHT Capable Water Depth Max: 400' 4/16 55

[GDF]

UK

4x1 month option
13

Ensco 101

2000

Heavy Duty, HPHT Capable Water Depth Max: 400'

2/16-7/16

155 125

[BP]

U.K.

1x6 months unpriced option

14

Ensco 100

1987

2009

Heavy Duty, HPHT Capable Water Depth Max: 400'

6/18

185

[Premier oil]

U.K.

15

Ensco 97

1980

Water Depth Max: 250'

2/19

69/TBD

[Aramco]

Saudi Arabia

-
16

Ensco 96

1982

2011

Water Depth Max: 250'

2/19

69/TBD

[Aramco]

Saudi Arabia

-
17

Ensco 94

1981

2008

Water Depth Max: 250'

5/16

85/TBD

[Aramco]

Saudi Arabia

1Y priced option
18

Ensco 92

1982

1996

Water Depth Max: 225'

1/16-1/17

1/17-8/18

95

TBD

[Conoco

Phillips]

U.K.

19

Ensco 88

1982

2004

Water Depth Max: 250'

11/16

85/TBA

[Aramco]

Saudi Arabia

1Y priced option

(14d)4Q'16

20

Ensco 80

1978

2011

Water Depth Max: 225' 4/17 145

[GDF]

U.K.

opt. +Cost adj. and option

(30d)3Q'16

21

Ensco 76

2000

Special Capabilities: HPHT Capable Water Depth Max: 350'

12/18

125/TBD

[Aramco]

Saudi Arabia

22

Ensco 75

1999

Special Capabilities: HPHT Capable Water Depth Max: 350' 1/17 45

[Fieldwood]

US GoM

23

Ensco 72

1981

2012

Water Depth Max: 225'

9/18

95

[Maersk] Denmark
24

Ensco 71

1982

Water Depth Max: 225'

7/18

95 [Maersk] Denmark
25

Ensco 68

1976

2004

Water Depth Max: 400' 5/16 68

[Chevron]

GOM

26

Ensco 54

Water Depth Max: 300'

9/17

90/TBD

+39

[Aramco]

Saudi Arabia

1Y priced option

27

Ensco 53

1982

2008

Water Depth Max: 300' 3/16 95

[NDC]

UAE

(21d) 1Q'16

+2x1Y unpriced option

28

Ensco 52

1983

2013

Water Depth Max: 300' 8/17 98 [Murphy] Malaysia

(28d)2Q'16

1Y unpriced option

Click to enlarge

4. Under Management

# Name

Year

Built

Water Depth Max

K feet

Contract

End

Day rate Location
1 Thunder Horse DeepWater semi-sub 1/17

120

95

[BP]

GOM

2 Mad Dog DeepWater Spar Drilling Rig 1/17

65

62

[BP]

GOM

3 Ensco 83 1979/2009

Under management Pemex

10/16 92

[Pemex]

Mexico

Click to enlarge

Rigs: Classified as Cold stacked, Ready stacked or available.

# Rig name Year Built Status End contract Location
Floaters
1

Ensco DS-1

1999 Cold Stacked Spain
2

Ensco DS-4

2010 Ready Stacked Early termination - $148 million lump sum paid Us GoM
3 Ensco DS-9 2015 Ready Stacked Early Termination - 2Y paid/$550k/d Asia
4 Ensco 5005 1982/1997 Ready Stacked Singapore
5 Ensco 8500 2008 Ready Stacked 10/15 US GoM
6 Ensco 8501 2008 Cold Stacked US GoM
7 Ensco 8502 2010 Cold Stacked US GoM
8 Ensco 8506 2012 Ready stacked US GoM
Jackups
1 Ensco 81 1979/2003 Cold Stacked US GoM
2 Ensco 82 1979/2003 Cold Stacked US GoM
3 Ensco 86 1981/2006 Cold Stacked US GoM
4 Ensco 87 1982/2006 Ready Stacked 9/15 US GoM
5 Ensco 99 1985/2005 Cold Stacked US GoM
6 Ensco 70 1981/1996 Ready Stacked UK
7 Ensco 102 2002 Ready Stacked UK
8 Ensco 56 1982/2006 Cold Stacked Malaysia
9 Ensco 67 1976/2005 Ready Stacked Malaysia
10 Ensco 105 2002/2010 Ready Stacked Singapore
11 Ensco 106 2005 Ready Stacked Malaysia
12 Ensco 91 1980/2012 Cold Stacked Bahrain
13 Ensco 84 1981/2013 Ready stacked 11/15 Bahrain
14 Ensco 98 1977/2009 Management contract ended with Pemex Rig redelivered to owner Mexico
15 Ensco 89 1982/2009 Management contract ended with Pemex Rig redelivered to owner Mexico
Click to enlarge

Rigs: Held for Sale/Discontinued operations.

Ensco DS-2 Cold stacked Spain
Ensco 7500 Cold stacked Spain
Ensco 6000 Cold stacked Spain
Ensco 5001 SOLD $2 million
Ensco 90 Cold stacked GOM
Ensco 58 Cold stacked Bahrain
Click to enlarge

Fleet Analysis as of February 16, 2016:

Total Drillships Semi-subs Jackups Under management
Under-construction 5 2 0 3 -
Total working rigs 46 5 10 28 3
Cold-stacked/Warm-stacked/Available 23

3

5 15 -
Held for sale 5 1 2 2 -
Total 79 11 17 48 3
Click to enlarge

Note: This backlog is a personal estimate (best estimate) starting mid-February 2016.

Click to enlarge

Commentary:

Ensco released its February fleet status on February 17, 2016. I noticed a few changes:

1 - The Ensco 8504, has been awarded a new contract. 3 1/2 months at $272k/d for Chevron, at an unknown location.

2 - The Ensco 5005, has been awarded a new contract. 2-month at $115k/d for Petronas/Carigali in Brunei until 7/16.

3 - The Ensco 5001, was sold for $2 million.

4 - The JU Ensco 101, the option (5-month~) was exercised by at a lower day rate from $155k/d to now $125k/d with BP in UK.

5 - The JU Ensco 102, has been awarded a 4-month contract with GDF in UK for $55k/d until 4/16 (accommodation work).

6 - The JU Ensco 89, under management, has been redelivered to Pemex.

7 - The JU Ensco 123, under-construction, has been delayed 19 months until Q1'18.

8 - The JU Ensco 92 has been awarded a long-term contract (32-month~) with ConocoPhillips from 1/16 to 8/18 for a special workover in North Sea UK. The day rate for the first year will be $95K/d and then will be mutually agreed.

9 - The JU Ensco 75 has been awarded a 12-month contract in the GoM by Fieldwood at $45k/d.

10 - The JU Ensco 68 got a 2-month extension with Chevron in the GoM at $68k/d. Initially $118k/d.

11 - The 2 rigs under management (BP in GoM) have now lower day rate.

12 - Rigs idle or cold stacked: 5 rigs for sale; 13 JU cold stacked or ready stacked; 5 semi-submersibles cold stacked or ready stacked; 3 Drillship cold stacked or ready stacked.

13 - ESV is still negotiating with Saudi Aramco for its 6 JUs actually working.

14 - The Ensco DS-5 contract has been voided (1/16) by Petrobras due to the bribery allegation with Pride. ESV is disputing the claim.

16 - The JU Ensco 86 is now cold stacked. The JU Ensco 87 is now idle.

This last quarter FSR has been quite busy, and I was glad to notice some new contracts and extensions. The additional backlog is approximately $170 million, my estimate. However, the problem with Petrobras and the DS-5 amount to a dispute of $80 million, in my opinion. This is a net of $110 million and any additional contract is surely welcome in this terrible market.

I calculated a total backlog as of February 15, 2016, at approximately $5.1 billion.

The situation is rapidly degrading for the company starting mid-2017 and revenues will be down significantly, if ESV cannot contract its fleet sufficiently in 2017?

The problem of paramount importance for the entire offshore drilling industry, is the price of oil and how fast it will recover from the $30 level?

It is difficult to be very optimistic on this issue, right now, whereas it seems that the oil producers are willing to discuss the problem more seriously. ESV will remain weak in 2016, but will survive this terrible bear cycle. A prudent accumulation could pay off ultimately in 2017-2018?

Disclosure: I am/we are long ESV.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.