More losses for drillers as Wells Fargo piles on with downgrades

|By:, SA News Editor

It's another down day for deepwater drillers after yesterday's drubbing, as Wells Fargo cuts its ratings and price targets for several big names, citing lower utilization and rates.

The firm downgrades and cuts earnings estimates for Ensco (ESV -2.3%), Diamond Offshore (DO -1.4%), Noble Corp. (NE -0.6%) and Transocean (RIG -2.1%) to Market Perform from Outperform.

Hercules Offshore (HERO +4.9%) is recovering a bit of yesterday's 15% loss, but the firm - which also cut shares to Market Perform - says it was spooked by HERO’s decision to abort the planned reactivation of a Gulf of Mexico jackup, showing management's concern about the strength and depth of HERO's most important cash-flow generating market.