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Thu, Feb. 4, 12:48 PM
Thu, Feb. 4, 11:48 AM
- Offshore drillers are on the move today as rising oil prices ease concerns about the difficult market that remains apparent in earnings releases from Noble Corp. (NE +1.1%), which reported last night, and Atwood Oceanics (ATW +17.2%), which reported earlier this week.
- NE reported below consensus Q4 earnings, but Evercore ISI's James West says the company continues to perform well operationally, with YTD unpaid fleet operational downtime edging up slightly to 5% from 4.6% in Q3.
- NE also announced plans to retire two rigs, the drillship Noble Discoverer and jackup Noble Charles Copeland, bringing its total rig attrition to four floaters and one jackup during the oil downturn.
- Jefferies says ATW has the most challenged balance sheet over the longer-term among its mid-cap coverage, but it is encouraged by ATW’s prospects to better position itself for the near-term with a covenant amendment, and maintains its Buy rating with a $9 price target (Q4 earnings).
- Related peers: RIG +3.6%, DO +3.8%, ESV +5.2%, RDC +4.3%, SDRL +2.5%.
Tue, Feb. 2, 5:38 PM
Tue, Feb. 2, 5:29 PM
Mon, Feb. 1, 5:35 PM
Fri, Jan. 15, 12:49 PM
Thu, Jan. 14, 5:30 PM
- Seadrill (NYSE:SDRL) CEO Per Wulff sees a challenging market through 2017 as low crude oil prices and spending cuts among oil companies continue to push drilling rig dayrates below breakeven levels.
- Seeing little appetite among oil companies to explore and drill for oil, "It's worrying when we see the oil price falling as it does now, because once the oil price is starting to return to normal you can add 12-15 months before you see the need for additional rig units," the CEO says.
- Wullf says he expects 2017 to remain difficult and that there is not enough new work to replace old contracts when they expire.
- Citigroup analysts believe the offshore drilling industry is undergoing a structural change, and see little chance of recovery "even if activity recovers post-2017."
- Nevertheless, SDRL ended +5.4% in today's trade as energy equities enjoyed a broad rally; other sector gainers included RIG +7.6%, ORIG +5.5%, NE +4.1%, DO +3.7%, ESV +3.6%, ATW +2.9%, RDC +2.8%.
Wed, Jan. 13, 10:59 AM
- Atwood Oceanics (ATW -2.9%) provides early earnings guidance for its December Q1 because of “unusual market volatility," now seeing EPS of $1.05-$1.20 vs. $0.94 analyst consensus estimate and revenues of $300M-$310M vs. $292M consensus.
- ATW says it is evaluating a potential $50M-$70M impairment adjustment to the valuation of the Atwood Falcon, one of its 11 offshore drilling units, as the rig approaches its scheduled contract end date.
- ATW will report its finalized quarterly results on Feb. 2.
Mon, Jan. 11, 5:47 PM
- Microsemi (NASDAQ:MSCC) will replace Atwood Oceanics (NYSE:ATW) in the S&P MidCap 400 after the close on Friday, the same day the company's $2.5B purchase of PMC-Sierra is expected to close. Atwood will take Microsemi's spot in the S&P SmallCap 600.
- MSCC +2% after hours to $31.47. Shares rose 6.4% in regular trading after Microsemi hiked its Q4 sales guidance and announced the PMC deal is expected to close in four days. Atwood is currently unchanged after hours.
Mon, Jan. 11, 3:44 PM
- Cowen analysts issue a wave of downgrades and stock price reductions among offshore drilling contractors, as they foresee further downside for the group with oversupply for offshore rigs and vessels lasting through 2018 or perhaps longer if commodities remain depressed.
- Cowen downgrades Atwood Oceanics (ATW -2.2%) and Noble Corp. (NE -4.5%) to Market Perform from Outperform with $10 price targets, both slashed from $18; the firm also cuts its price target on Diamond Offshore (DO -0.5%) to $21 from $24, on Rowan (RDC -4%) to $16 from $22, and on Seadrill (SDRL -4.4%) to $3 from $8.
- The firm says its recent annual survey forecasts a 17% Y/Y drop in 2016 global spending for the sector with a bias to the downside because of the continuing pressure in commodity prices, and expects offshore rig demand to remain anemic with further deterioration in utilization levels and dayrates.
Dec. 28, 2015, 11:45 AM
- WTI crude is down 3.2% to $36.90/barrel, and Brent crude down 2.5% to $36.95/barrel, leaving prices close to 11-year lows. Energy industry firms are among the biggest decliners on a day the S&P is down 0.6%.
- Fears about excess supply appear to be weighing once more. OPEC figures point to a global oil supply glut of more than 2M barrels (over 2% of global demand); a smaller glut is expected next year. Meanwhile, Japanese government data indicates the country's oil product sales fell to a 46-year low in November, and European data suggests the continent's oil product demand growth turned negative in October.
- The biggest casualties include Whiting Petroleum (WLL -9.9%), Oasis Petroleum (OAS -8.2%), Vanguard Natural Resources (VNR -12.5%), Denbury Resources (DNR -8%), SandRidge Energy (SD -8.1%), SandRidge Permian Trust (PER -10.9%), SandRidge Mississippian Trust (SDT -7.5%), U.S. Silica (SLCA -6.2%), Marathon Oil (MRO -6.7%), C&J Energy Services (CJES -8.1%), MV Oil Trust (MVO -9.2%), Bonanza Creek (BCEI -6.4%), Parker Drilling (PKD -7.9%), and Continental Resources (CLR -5.9%).
- Other notable decliners include Kinder Morgan (KMI -5%), Williams Partners (WPZ -4.4%), EOG Resources (EOG -3.4%), Cheniere Energy (CQP -3.6%), SeaDrill (SDRL -3.5%), Encana (ECA -2.8%), Devon Energy (DVN -2.7%), Ensco (ESV -3.8%), Hercules Offshore (HERO -4.7%), Atwood Oceanics (ATW -4.9%), Helmerich & Payne (HP -3.8%), and Pioneer Natural (PXD -2.6%).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Dec. 18, 2015, 3:44 PM
- Atwood Oceanics (ATW -12.1%) is sharply lower after asking Daewoo Shipbuilding for a further delay in the delivery of two newbuild ultra-deepwater drillships by another year.
- ATW says it will make payments of $50M for each drillship, and Daewoo will extend all remaining milestone payments - $94M for the Atwood Admiral and $305M for the Atwood Archer - until their respective delivery dates, now Sept. 30, 2017 and June 30, 2018, respectively.
- Also, RBC Capital lowers its stock price target price for ATW to $14 from $19.
Dec. 4, 2015, 5:44 PM
Dec. 4, 2015, 3:49 PM
- Barclays sees little reason for optimism among offshore drilling contractors despite recent outperformance, particularly in light of recent guidance from major oil companies for dramatically reduced offshore spending in 2016; the firm expects another leg down in stock performance as a lack of contracting activity and a massive oversupply of floaters looks daunting in light of the spending cuts.
- Nevertheless, Barclays upgrades Atwood Oceanics (ATW -5.8%) to Equal Weight from Underweight with an $18 price target, and now considers the stock fully valued after dropping ~23% over the past three months; the firm sees the most downside to Transocean (RIG -3.4%), Diamond Offshore (DO -3.5%) and Noble Corp. (NE -4.6%), while Pacific Drilling (PACD -5.6%) and Ocean Rig UDW (ORIG -4.1%) show the most upside but also come with the most risk with little equity remaining and looming liquidity issues.
Nov. 30, 2015, 2:23 PM
- The "lower for longer" consensus on crude oil prices is overly conservative, and prices will begin bouncing back next year, Guggenheim analysts say as they upgrade the oil services sector to Buy and see plenty of upside for the major players given current market conditions.
- Guggenheim is calling for oil prices to return to $100/bbl by 2018, and sees 10% upside across the board for oil services stocks in the next year resulting from the group's unique exposure to crude prices.
- Within the group, the firm prefers Rowan (RDC +1.8%) and Atwood Oceanics (ATW +1.6%), as their backlogs should help reduce near-term risk, RDC has no newbuild commitments and ATW is finalizing a contract in Brazil for one of its two uncontracted rigs, utilization in the Middle East (NYSE:RDC) and Australia (NYSE:ATW) should be resilient on a relative basis, and both have fleets that make them more interesting M&A candidates.
- Upgraded to Buy from Neutral: CAM, RIG, NE, OII, PACD, DO, ESV, CLB, OIS, HP, NBR, CRR, NOV, DRQ, FI, PTEN, SSE, FTI, CJES, FET, SPN.
Nov. 19, 2015, 6:12 PM
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