- Credit Suisse analysts lower earnings estimates for offshore drillers Noble Corp. (NYSE:NE), Ensco (NYSE:ESV), Rowan (NYSE:RDC), Hercules Offshore (NASDAQ:HERO) and Seadrill (NYSE:SDRL), citing exposure to Saudi Aramco.
- Earlier this year, the Saudis played hard ball with the drillers in taking pricing discounts of 10%-35% on contracted rigs, but the discounts were expected to be short-term; instead, Brent crude has continued to tumble, and the contracts likely will move even lower, Credit Suisse says.
- Should Aramco contracts not reset higher - and the firm thinks they go lower - NE would lose $120M in revenue in 2016, RDC would lose $48M, ESV would lose $78M, SDRL would lose $20M, and HERO would lose $44M in revenue, according to Credit Suisse's calculations.