Nov. 13, 2014, 12:17 PM
- Helmerich & Payne (HP -7.2%) is sharply lower, despite setting records for revenue, operating income and drilling activity in its just concluded FY 2014.
- Q3 operating earnings for HP's U.S. land segment totaled $258M, up 9.6% Y/Y but down 4.6% from FQ3.
- HP expects to spend $1.4B-$1.7B capex in the next year, and says it is "very well prepared for any type of softening in the market."
- HP also says it entered into agreements to build and operate six new patented FlexRigs in U.S. oil and gas plays; the company has contracted 89 newbuild FlexRigs just in the past 14 months.
Nov. 13, 2014, 6:11 AM
Nov. 12, 2014, 5:30 PM
Oct. 23, 2014, 3:46 PM
- Diamond Offshore's (DO +5.5%) better than expected Q3 results is providing a lift across the offshore drilling sector today: RIG +3.8%, ESV +4.1%, RDC +2.6%, SDRL +1.9%, PKD +3.6%, HP +3.1%, ATW -0.5%.
- It was a trifecta of good news for DO: Its operating profit of $0.97/share easily topped Wall Street consensus for $0.79, it announced a special dividend of $0.75/share, and a positive fleet status update included two new rigs that had found work with Hess and Petrobras extending contracts on three rigs for three years.
- However, Cowen’s J.B. Lowe is cautious, noting that while that the $400K dayrates with Hess give DO a solid backlog though a soft time in the market, "they represent a new low in leading-edge newbuild ultra-deepwater floaters in this part of the cycle.”
Oct. 20, 2014, 6:14 PM
- Seadrill (NYSE:SDRL) was downgraded to Neutral/High Risk from Buy today at Citigroup, which cited a combination of disappointing exploration, further investment decision delays and increased oil price uncertainty as leading to a 10% reduction in its medium-term rig demand forecast.
- Citi believes the decline, combined with significant supply added in 2015, likely will extend the current market weakness into 2016, which could materially affect SDRL’s ability to sign and thus finance the next wave of its newbuilds; it also sees increased risk of dividend cuts to maintain the leverage ratio within covenants.
- SDRL finished flat today but most offshore drillers rose even as the firm lowered its growth estimates across the sector to reflect a slowdown in investment: ATW +3.4%, HP +3.3%, RDC +3.2%, DO +2%, RIG +1.8%, NE +1.7%, PACD +1.2%, ESV +1%.
Oct. 17, 2014, 3:17 PM
- UBS is upgrading the U.S. land drillers, believing that the selloff in the sector has been overdone, even assuming a more cautious North America environment.
- The firm stresses that buying the land drillers is partially a play on oil prices - it sees upside risk of 40%-80% if oil prices return to $90/bbl for WTI but downside risk of 25% if oil prices slide to $75 for a sustained period of time - but it says underlying industry fundamentals also are positive and the demand for pad-capable rigs will grow.
- Helmerich & Payne (HP -2.1%), Nabors Industries (NBR +1.1%) and Patterson-UTI Energy (PTEN +0.2%) are all upgraded to Buy from Neutral.
Oct. 15, 2014, 3:59 PM
- Oil services companies are rising after Citigroup issued positive comments on a number of stocks in the sector.
- Baker Hughes earns a Buy rating, seen as having a strong chance of meeting EPS estimates before tomorrow's open given recent contract wins in Norway and Brazil, and the stock's valuation is "compelling."
- Among small- and mid-caps, Citi starts Patterson-UTI (PTEN +5.7%) and RPC (RES +2.3%) with Buy ratings, seeing each as likely to outperform if, as the firm forecasts, crude prices rebound and E&P companies' capital expenditures are higher than expected.
- Citi tags Schlumberger (SLB +0.5%), Halliburton (HAL +2.1%), Weatherford (WFT +1%), Superior Energy (SPN +2%) and Helmerich & Payne (HP +5.1%) with Neutral ratings.
Oct. 14, 2014, 10:55 AM
- Helmerich & Payne (HP +1.3%) is upgraded to Outperform from Market Perform at FBR Capital but with a lower price target of $108 from $120.
- FBR thinks HP offers a total potential return of 40% before factoring the high probability of future dividend increases, and believes HP has become compelling by the firm's primary valuation metrics.
- FBR cuts price targets by 10%-15% for several other oilfield services stocks, including Halliburton (HAL -0.3%), Baker Hughes (BHI -0.5%), Schlumberger (SLB +0.4%), RPC ([[RES] -2%), Independence Contract Drilling (ICD +0.3%) and Tesco (TESO +0.4%).
Oct. 9, 2014, 3:43 PM
- Offshore drillers have company now that falling oil prices are hitting the shares of land drillers such as Helmerich & Payne (HP -3.7%), Patterson-UTI (PTEN -6.8%), Nabors Industries (NBR -4.7%) and Seventy Seven Energy (SSE -5%) - with good reason, Susquehanna analysts say.
- The firm views land drillers at considerable risk to estimate revisions, given high current dayrates and significant newbuild construction activity, which could be problematic if lower crude prices persist or a weaker outlook on U.S. E&P spending comes out of earnings season.
- Nevertheless, the firm finds valuations much better in land drilling for now, and it prefers PTEN and NBR at a respective 3.7x and 4.5x 2015 EBITDA.
Sep. 11, 2014, 3:36 PM
- Helmerich & Payne (HP -1.9%) is upgraded to Buy from Hold with a $124 price target at Argus, which believes HP's rare underperformance relative to the market over the last three months provides a favorable entry point for investors seeking exposure to a top U.S. drilling company with a focus on unconventional resources.
- Argus says HP continues to benefit from its position as the leading provider of high-horsepower, high-specification, premium AC-drive rigs in the U.S. onshore market, which are favored by E&P customers drilling complex unconventional horizontal wells.
Sep. 10, 2014, 5:35 PM
Aug. 21, 2014, 2:29 PM
- The latest fleet status reports from Diamond Offshore (DO -0.2%) and Hercules Offshore (HERO -3.8%), released after yesterday's close, appear to provide another sign that offshore drilling likely will get worse before it gets better.
- Raymond James analysts explain that DO's negative fleet status included a lower than expected dayrate on the ultra-deepwater rig Ocean Monarch for one year at $425K, below the firm's estimated 2015 rate of ~$450K; a convertible option to alter the contract to an 18-month term also was below expectations.
- HERO's August fleet status included a contract termination; Raymond James had expected choppiness in the coming months through hurricane season, but says the termination and increase in potential rigs available is cause for further caution.
- Also: SDRL -0.7%, RIG -0.5%, ESV -0.2%, HP -1.3%, RDC -0.7%, ATW -1%.
Aug. 12, 2014, 11:43 AM
- Helmerich & Payne (HP -0.5%) is upgraded to Accumulate from Neutral with a $115 price target at Global Hunter, which believes HP is poised to deliver stronger earnings growth than consensus expects through FY 2015.
- Global likes HP's backlog of 38 rigs on order with term contracts attached and expectations of continuing to build rigs on order.
- However, the firm has become more conservative on its valuation criteria for the group and in that vein have reduced the calendar-year 2015 EV/EBITDA multiple used to derive its price target.
Jul. 31, 2014, 6:04 AM
Jul. 8, 2014, 12:14 PM
- Johnson Rice is optimistic about Atwood Oceanics (ATW -2.3%) despite lowering its 2014 EPS forecast to $4.63 from $4.76; the firm considers ATW among its top picks among offshore drillers, with its combination of a well-contracted fleet with a discounted multiple vs. its peers on visible earnings growth in 2015.
- ATW and other offshore drillers are lower after Seadrill (SDRL -4.8%) announced it would sell $1B in convertible bonds; RIG -1.7%, HERO -1.3%, ESV -0.9%, RDC -0.9%, HP -0.8%, DO -0.1%.
Jun. 19, 2014, 12:26 PM
- Despite news that Atwood Oceanics (ATW +0.4%) found work for its semi-submersible Atwood Hunter for drilling off Equatorial Guinea, offshore drillers aren't enjoying the same boost they received yesterday from fleet updates provided by Ensco (ESV -0.6%) and Diamond Offshore (DO -0.6%).
- Cowen analysts view the contract as a positive since it fills a good portion of the gap in ATW’s remaining 2014 availability; should the Hunter option be exercised, the only rig in ATW’s fleet with 2014 availability is the jackup Atwood Mako, which completes a contract in November.
- Also today: SDRL -0.4%, RDC -0.1%, HP +0.8%, HERO +0.7%, NADL +1.4%, ORIG +0.4%, PACD -0.1%.
Helmerich & Payne Inc is engaged in contract drilling of oil & gas wells for others in the ownership, development & operation of commercial real estates. Its business comprises of three reportable segments: U.S. Land, Offshore & International Land.
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