Oceaneering Holding Up Better Than Most
Stephen Simpson, CFA
Stephen Simpson, CFA
Oceaneering: A Chance To Feed On Mr. Market's Despair
Aug. 26, 2015, 3:25 PM
- Analysts say Schlumberger’s (SLB -4.2%) acquisition of Cameron International (CAM +41.7%) is not particularly surprising, given SLB's two years of experience working alongside CAM through their OneSubsea joint venture and track record of soaking up JV partners.
- The combination effectively allows the two companies to extract the type of cost savings found at OneSubsea across the rest of their businesses; SLB thinks it can find pretax benefits of $600M in the second year after the deal, most of which will come from cost-cutting.
- Citigroup says the deal will firmly establish SLB as the dominant and most diversified oilfield service provider, with total estimated revenues for the combined entity of $46B in 2015, a figure the prospective Halliburton (HAL +2.3%) and Baker Hughes (BHI +2.5%) combo cannot match.
- SLB is making a strategic bet on a recovery in deepwater drilling, even if not in 2016, Tudor Pickering says; with 7M-plus bbl/day of global oil production coming from deepwater reservoirs, it makes sense that offshore activity eventually will rebound.
- The deal is not likely to touch off an M&A wave in the oilfield services industry because the global crude slump has strained the finances of many companies, leaving few able to make such a move, says Edward Jones analyst Rob Desai.
- But several potential acquisition targets in the services industry are higher: OII +8.3%, DRQ +7.4%, FTI +6.5%, NOV +4.1%, FET +3%.
Feb. 2, 2015, 7:48 AM
- Oceaneering (NYSE:OII) agrees to acquire privately-held C&C Technologies, a provider of ocean-bottom mapping services in deepwater and marine construction surveys for both surface and subsea assets, for ~$230M.
- OII expects the acquired business to generate $20M-$30M of EBITDA within a year of the deal closing and to be accretive to earnings.
Dec. 16, 2014, 8:58 AM
- GE agrees to acquire Oceaneering's (NYSE:OII) Subsea Electric Actuator product line, which specializes in the design and manufacturing of specialty subsea products with a focus on electric valve actuators.
- GE says the acquisition of the product line will pave the way for electrification in its oil and gas subsea space, providing a new technology that is faster to operate for processing applications, has excellent enhanced diagnostic capabilities and can be seamlessly integrated into a customer's existing controls, communications and power network.
- Financial terms are not disclosed.
- GE -0.8% premarket.
Nov. 14, 2014, 12:48 PM
- Oil services companies are mostly higher as Halliburton (HAL +1.7%) is indeed in talks to buy Baker Hughes (BHI +0.5%), a deal that would provide a jolt to oilfield services companies contending with falling oil prices: SLB +0.4%, OIS +1.2%, SPN +2.3%, CAM +0.2%, FTI -0.3%, NOV -0.6%.
- Sterne Agee analyst Stephen Gengaro calls a potential HAL-BHI combo a “HAL of a Frac-ing Deal," seeing several positives for HAL including strengthening its relatively weak position in artificial lift and production chemicals which are critical to enhancing HAL’s mature field strategy, enabling it to leverage its unparalleled U.S. pressure pumping logistics chain to enhance the efficiency of BHI’s operations, and providing the opportunity for significant cost savings which likely would total $600M-$750M or more.
- While antitrust concerns could force some divestitures, Gengaro does not believe it would prevent a deal from happening.
- Other potentially attractive M&A targets among oil services companies could include Dril-Quip (DRQ +0.7%), Frank’s International (FI +2.6%) and Oceaneering (OII -0.2%), Simmons & Co. says.
Oceaneering International, Inc. provides engineered services and products primarily to the offshore oil and gas industry. The company provides remotely operated vehicles, built-to-order specialty subsea hardware, engineering and project management, subsea intervention services, including manned... More
Sector: Basic Materials
Industry: Oil & Gas Equipment & Services
Country: United States
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