Atwood Oceanics Cheap Due To Unrelated Weakness
Illuminati Investments • 13 Comments
Illuminati Investments • 13 Comments
Market Is Overlooking Atwood Oceanics' Future Cash Flow
Casey Hoerth • 15 Comments
Casey Hoerth • 15 Comments
Atwood Oceanics To Continue Winning Streak And Be Triple-Bagger From Current Levels
Power Hedge • 11 Comments
Power Hedge • 11 Comments
Wed, Jul. 27, 5:57 PM
- Offshore drilling stocks were slammed today as crude oil prices fell to three month lows, but Atwood Oceanics (NYSE:ATW) took the worst beating, -8.6% following its latest fleet status update.
- The contract for the Atwood Osprey rig, which had been expected to start working for Woodside Energy until January 2017 at a $450K dayrate, was extended but at a new rate of $190K; also, no contracts were announced for two uncontracted, newbuild drillships despite talk of a potential Brazil agreement in the works.
- Also in today's trade: RIG -4.1%, DO -3.1%, RDC -4.6%, ESV -4.7%, SDRL -0.6%, NE -3%.
Wed, Jul. 27, 2:02 PM
Fri, Jul. 22, 2:23 PM
- Transocean (RIG -5.5%) falls more than 5% after its latest fleet status report showed it stacked an additional six rigs, taking its total number of currently stacked rigs to 28, with reduced dayrates for others.
- RIG says it won a two-year contract for one of its semi-submersibles to operate off India for ONGC at a $127K dayrate, and a newbuild ultra-deepwater rig started operations on a 10-year contract in the Gulf of Mexico at a $498K dayrate.
- Following the report, RBC's Kurt Hallead says RIG shares have limited upside until the market gains more confidence in the supply and demand outlook for floating rigs in 2017-18. Currently, fundamentals continue to weaken for floating rigs, and it remains unclear where dayrates and utilization may bottom.
- Offshore drillers are broadly lower: RIGP -1%, DO -1.5%, ESV -4.2%, RDC -5%, SDRL -1.6%, NE -4.8%, ATW -3.6%, PACD -3.8%.
Mon, Jul. 11, 3:19 PM
- Transocean (RIG -2.4%) is sharply lower after Seaport Global downgraded its rating to Sell from Neutral with a $10 price target, as valuation "seems stretched... given that little has changed regarding the protracted oversupply of rigs in offshore markets."
- RIG also will have a higher annual cash interest expense burden due to last week's $1.25B unsecured note issuance, Seaport says.
- Offshore drillers are broadly lower as crude oil futures fell 1.4% to a two-month low $44.76/bbl: RIGP -2.2%, SDRL -1.1%, DO -0.3%, ESV -3%, NE -1.1%, RDC -0.4%, ATW -2.6%.
Tue, Jul. 5, 7:19 PM
- Citigroup reshuffles its rankings a bit among offshore drillers in light of the wide spread in YTD performance that has seen the likes of Ensco (NYSE:ESV) and Noble Corp. (NYSE:NE) suffer sizeable losses while Diamond Offshore (NYSE:DO) and Atwood Oceanics (NYSE:ATW) sport double-digit gains.
- The firm ranks ESV at Neutral but nevertheless atop the group given its YTD underperformance (-37%) and balance sheet improvement through its April debt tender, while DO ranks second given backlog into 2019 and healthy balance sheet, and ATW is a close third as short covering could fuel further upside.
- Citi says Rowan (NYSE:RDC) has slipped to the bottom of its Neutral-rated stocks in the group on YTD outperformance (+4%), risk of contract cancellation and an EBITDA cliff in 2018; the firm continues to rate Transocean (NYSE:RIG) and Pacific Drilling (NYSE:PACD) at Sell.
Tue, Jun. 28, 3:28 PM
- Ensco (ESV +5.9%) surges after Susquehanna upgrades shares to Neutral from Negative, citing recovering crude oil prices and the stock's valuation and relative underperformance; of course, rising crude prices today also are helping.
- The firm says higher crude prices has not sparked improved demand for offshore rigs, and it could take through 2018 before any material demand potentially arises, but ESV has underperformed other offshore drillers by a wide margin and now trades below the average for offshore drillers.
- But Evercore ISI remains cautious on offshore drillers, arguing that "not a single stock screens 'cheap,'" although it prefers ESV, Noble Corp. (NE +1.2%) and Rowan (RDC +3.5%) as relative Buys for their superior fleet quality, low operating cost basis, low capex and solid backlog, while Hold-rated Ocean Rig UDW (ORIG +3.6%) and Diamond Offshore (DO +1.8%) deserve "a degree of valuation differentiation due to its highly contracted fleet in the near term."
- Also higher today: RIG +3.9%, ATW +7.1%, SDRL +2.2%, SDLP +12.3%, PACD +2.7%.
Fri, Jun. 17, 2:00 PM
Wed, Jun. 8, 7:12 PM
- The recent sharp rally in offshore drillers may be due to short covering, potentially in the midst of a “2 sigma short interest unwind" if oil prices continue to strengthen, according to Evercore ISI analyst James West.
- A portfolio of lower-risk offshore drillers - Atwood Oceanics (NYSE:ATW), Diamond Offshore (NYSE:DO), Ensco (NYSE:ESV), Noble Corp. (NYSE:NE), Rowan (NYSE:RDC) and Transocean (NYSE:RIG) - has been shorted 4.4x their historical average, and a total of 200M shares were short as of May 31 vs. a 50M monthly average during 2005-13, West calculates.
- Short interest as a percentage of the float as of yesterday, according to Markit: ATW 34.5%, DO 20%, RDC 17%, RIG 17%, NE 14%, ESV 3.5%.
- While the firm rates ESV, NE and RDC as relative Buys and believes Hold-rated Ocean Rig UDW (NASDAQ:ORIG) and DO deserve a degree of valuation differentiation, West urges caution on the overall group, seeing the industry as fundamentally oversupplied.
Thu, May 26, 2:00 PM
Mon, May 9, 12:47 PM
- Atwood Oceanics (ATW -10.4%) is downgraded to Hold from Buy with a $12 price target at Jefferies, which thinks balance sheet catalysts have played out; ATW soared by a third on Friday following its Q1 earnings beat and have surged 92% since Jan. 20.
- The firm says its Buy recommendation had been premised on ATW bolstering its balance sheet through a favorable credit facility amendment, which occurred in late March, and early retirement of debt occurred in a more aggressive but entirely prudent fashion than expected - $154M retired, or 24% of outstanding senior notes, at a 36% discount.
- Near read Atwood Oceanics: Second quarter 2016 results and commentary
Fri, May 6, 6:45 PM
- Atwood Oceanics (NYSE:ATW) soared by fully a third in today's trade following a stellar Q1 earnings report driven by a combination of cost cutting and debt repurchases.
- ATW says Q1 drilling costs fell across all three of its asset classes, with costs in ultra-deepwater, deepwater and jackup fleets down by a respective 20.6%, 40.6% and 36.7% Y/Y.
- ATW also repurchased $13.4M in principal of its senior notes for $5.1M to recognize an $8.4M gain, which boosted Q1 EPS by $0.13; ATW says repurchases continued in April, taking out another $140.7M in principal for $94M.
- But Schaeffer's Research notes that some of today's rally could be the result of short-covering, as 43% of ATW's float is sold short.
- Other offshore drilling contractors, which also have been reporting better than expected earnings, finished with strong gains: RIG +6.2%, PACD +5.3%, DO +4.7%, ESV +4.7%, RDC +4.4%, NE +3.9%, but SDRL -3.4%.
Fri, May 6, 12:45 PM
Thu, May 5, 6:06 PM
Wed, May 4, 5:35 PM
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Mon, May 2, 3:45 PM
- Diamond Offshore (DO +1.4%) is higher after Q1 earnings easily exceeded analyst estimates, but it is not helping shares of other oilfield services companies in today's trade.
- Wells Fargo views DO's report positively, although results likely included noise from the accounting of a demobilization fee and notes that another contract termination in Mexico could be viewed as a partial negative offset.
- The Zephirin Group contends that DO's do not overshadow weak fundamental conditions in the offshore industry likely to persist, hurting earnings through 2018 and beyond for the likes of Noble Corp. (NE -2%) and Ensco (ESV -3.2%), which reported earnings last week (I, II).
- Zephirin rates NE and ESV at Hold - High Risk, forecasting a 30% reduction in dayrates for NE's Sam Croft and Tom Madden drillships and rate reductions of up to 25% or termination in the near future for ESV's four rigs working in Brazil for Petrobras at a day rate range of $300K-345K.
- Also: RIG -0.7%, RDC -1.4%, ATW -0.7%.
- Now read Diamond Offshore names Youngblood as new CFO
Thu, Apr. 14, 3:30 PM
- The Obama administration announces new oil well control rules aimed at preventing the kind of blowout that happened in the 2010 Gulf of Mexico oil spill.
- The regulations announced by the Interior Department tighten requirements for blowout preventers, well design, well control casing, cementing and sub-sea containment, and call for real-time monitoring, third-party reviews of equipment, regular inspections and safe drilling margin requirements.
- The effects will be particularly acute for the Gulf’s top crude oil and gas producers, Royal Dutch Shell (RDS.A +1.1%), BP (BP -1.6%), Chevron (CVX +0.1%) and Exxon Mobil (XOM +0.4%); XOM says the new rules will cost $25B over 10 years and render many offshore discoveries worthless.
- Offshore drilling stocks are broadly lower on the news: RIG -6.1%, DO -1.4%, ESV -5.1%, RDC -7.3%, NE -5.4%, ATW -9%, SDRL -8.9%, SDLP -4%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, FIF, PXJ, RYE, NDP, GUSH, DRIP, DDG, FXN
Atwood Oceanics, Inc. is a global offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. It owns mobile offshore drilling units and is constructing ultra-deepwater drillships and high-specification jackups. The company was founded... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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