- Recent bearish views on offshore drillers are forgotten for at least a day, as Diamond Offshore's (DO +2%) solid Q4 earnings and revenue beats help lift the entire sector.
- Cowen analysts especially like DO's increased dayrates: Q4 ultra-deepwater average dayrates rose to $350K/day from $284K, deepwater dayrates increased to $402K/day from $380K, and mid-water floater rates rose to $277K/day from $258K.
- However, Wunderlich notes that while the contracts and extensions are a positive, the low duration of the contracts may be the new norm for many of DO’s older lower specification rigs, which will translate to a lower backlog and less revenue visibility.
- ESV +3.4%, SDRL +2.1%, ATW +2.1%, RIG +2%, HP +2%, NBL +1.9%, RDC +1.9%, PKD +1.8%, HERO +1.3%.
Diamond Offshore's surprising Q4 strength lifts drillers, DO +2%
Feb 6 2014, 15:19 ET