- Seadrill (NYSE:SDRL) is maintained with a Sell rating and a $2 stock price target at Evercore ISI, which issued a report today highlighting the company's massive amount of debt coming due during the next 12 months.
- The firm notes that Q2 results showed SDRL generated $303M in cash from operations and lowered capex to just $13M in Q2 from $37M in the prior quarter; the company built cash by $195M to $1.287B, and Evercore expects SDRL to continue to build cash as $2.388B of debt is due in the next 12 months, and believes additional debt-for-equity swaps and potential new equity issuances are likely.
- With ~20% of SDRL's floater fleet cold stacked and another 20% of the floater and jackup fleet idle, the firm thinks more cold stackings are likely, as well as deferral of five newbuild floaters and eight jackups through at least 2017.