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
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, 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
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, 12:45 PM
Thu, May 5, 6:06 PM
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
Mon, Mar. 21, 2:48 PM
- Atwood Oceanics (ATW +3.3%) says its Australia subsidiary's drilling services contract with Woodside Energy (OTCPK:WOPEF, OTCPK:WOPEY) for the semisubmersible Atwood Eagle has been suspended.
- ATW says the remaining 165-day term is transferred to the semisubmersible Atwood Osprey for Woodside's utilization upon completion of the Atwood Osprey's current drilling program.
- Alterations of oil and gas offshore drilling contracts has been a recurring theme as low oil prices continues to cause producers to cut back.
Fri, Mar. 11, 3:27 PM
- Goldman Sachs sees “green shoots [appearing] in the distance” for the oilfield services sector but not offshore drillers, as the firm downgrades Atwood Oceanics (ATW +2.9%) and Noble Corp. (NE +0.7%) to Sell, where they join Transocean (RIG +3.1%).
- Goldman says offshore drilling is the only group where it expects EPS/EBITDA to continue to fall through 2018; offshore driller EBITDA for 2016 is being supported by legacy contracts that are almost 2x current spot rates, which should fall sharply as the contracts expire in 2016-17 and rigs roll over to spot rates.
- Even if oil prices recover, Goldman thinks deepwater drilling activity growth would lag growth in U.S. shale activity, since project economics generally are better in U.S. shales and E&Ps involved in U.S. shales are quicker to react; deepwater activity is largely comprised of a few big companies such as BP, Shell, Chevron and Petrobras, who are not likely to meaningfully increase their rig demand in a short period of time to absorb the current oversupply.
Wed, Mar. 9, 3:23 PM
- Ocean Rig UDW (ORIG -22.9%) plunges after missing Q4 earnings expectations and saying "prospects for the industry remain bleak” and “are likely to remain so at least until 2018.”
- ORIG says it is in discussions with lenders of its loan agreement related to the consequences of Ocean Rig Apollo termination, and that the situation could evolve into a "significant prepayment" of the loan.
- ORIG says its fleet operated at 99.5% utilization during Q4, and FY 2015 fleet operating efficiency was ~98.2%.
- Although ORIG’s comments were more bearish than the outlook described by other offshore drillers, the company’s earnings are hurting other names in the space: DRYS -19.6%, SDRL -16.4%, RIG -2.3%, NE -5.7%, ESV -3.9%, DO -1.4%, RDC -4.4%, ATW -3.3%.
Thu, Mar. 3, 2:58 PM
- Offshore drillers are surging today, which RBC analysts at least partially attribute to Noble Corp.'s (NE +16.1%) news that it spent $200M to buy back bonds due in 2020 and 2021, greatly reducing its debt.
- RBC estimates that NE would be able to retire ~$300M of debt principal at face value for $200M with new borrowings on the revolver, which should generate annual interest savings of ~$10M or a ~$0.03 impact to EPS.
- Ben Levisohn of Barron's also notes that oil companies in general have been able to offer stock and pay down debt, which has reduced some of the fears that the entire sector could go bankrupt, and that short interest in offshore drillers has been high.
- Also: RIG +9.9%, SDRL +11.7%, ESV +13.2%, RDC +10.5%, DO +5.9%, ATW +20%, PACD +42.6%.
Tue, Mar. 1, 10:58 AM
- Moody’s cut the credit ratings of six offshore drillers late Monday, expecting the group to face an extremely challenging operating environment through at least 2018.
- Moody's cuts Ensco (ESV -7.2%) by five notches to B1 from Baa2, saying "earnings and liquidity will decline over time as the company is compelled to rationalize its fleet to adjust to reduced demand conditions."
- Falling four notches were Atwood Oceanics (ATW -8.8%), Noble Corp. (NE -2%) and Rowan (RDC -2.1%); the ratings agency expects ATW to breach a debt covenant in 2017 and says the company is at increased risk of having to restructure.
- Debt ratings falling three notches were Diamond Offshore (DO -0.5%) and Transocean (RIG -1.8%).
Thu, Feb. 18, 4:30 PM
- Atwood Oceanics (NYSE:ATW) -2.9% AH after eliminating its quarterly dividend, a move it says will provide "greater flexibility to weather the current downturn."
- ATW paid a dividend of $0.075/share in the previous quarter, which was cut from a prior $0.25/share payout.
- ATW says the elimination will save the company nearly $5M/quarter.
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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