• Dec. 16, 2016, 1:05 PM
    • Offshore drillers likely will remain weak through 2017, RBC analysts say, as fundamentals in the group remain challenged and relatively better prospects are available via North American land-focused names.
    • RBC believes the market needs to see sustained oil prices above $50/bbl to stimulate shallow, infill and development drilling in the Gulf of Mexico and North Sea and greater than $60 for deepwater exploration; drillers say they are starting to receive more inbound rig inquiries from customers regarding rig type, pricing and availability, but they are typically for assets available in 2018.
    • RBC downgrades several stocks, led by Transocean (RIG +1.1%), which the firm says has limited upside until the market gains more confidence in the supply/demand outlook for floating rigs; fundamentals continue to weaken for floating rigs, and it remains unclear where dayrates and utilization may bottom.
    • In addition to RIG, the firm also cuts Noble Corp. (NE +3.7%), Atwood Oceanics (ATW -0.6%), Diamond Offshore (DO +0.5%), Rowan (RDC +0.6%) and Oceaneering to Underperform; Helmerich & Payne (HP -2.1%) and TETRA Tech (TTI -1%) are lowered to Sector Perform.
    Dec. 16, 2016, 1:05 PM | 17 Comments
  • Dec. 15, 2016, 11:41 AM
    • Rowan (RDC +0.6%) and Nabors Industries (NBR +0.4%) sign separate contracts with Saudi Arabia to establish joint ventures to own, manage and operate drilling rigs.
    • RDC CEO Thomas Burke announces plans for his company's first rig from a new joint venture with Saudi Aramco and to build two offshore rigs annually over 10 years and delivering the first in 2021.
    • NBR CEO Anthony Petrello, also seeking to boost its Saudi manufacturing operations, says the company plans to start operations in April with 46 onshore rigs and adding another 50 over the next 10 years.
    • There could also be cooperation between the two ventures, Petrello adds.
    Dec. 15, 2016, 11:41 AM
  • Dec. 13, 2016, 3:20 PM
    • Offshore drillers Atwood Oceanics (ATW +1.9%) and Rowan (RDC +0.3%), as well as Oceaneering International (OII +3.1%), Helix Energy Solutions (HLX +0.3%) and Flotek Industries (FTK -2.9%) are the favorite takeout candidates among oilfield services stocks for Stephens analyst Matthew Marietta.
    • As Marietta says today's Patterson-UTI (PTEN -7.3%) "well-priced takeout" of Seventy Seven Energy attests, the firm believes M&A in the sector will remain prevalent and continues to see deal-flow potential in well-capitalized companies with technology differentiation or top tier asset quality.
    • Marietta believes confidence is becoming restored in oilfield services company management teams and that the potential accelerates for the IPO market to heat up.
    Dec. 13, 2016, 3:20 PM | 17 Comments
  • Dec. 9, 2016, 5:35 PM
    • Top gainers, as of 5.25 p.m.: WTI +3.6%. BMRN +1.2%. EOCC +1.2%. JAZZ +1.1%.
    • Top losers, as of 5.25p.m.: ACHN -2.1%. RDC -2.0%. RH -1.7%. KLIC -1.3%. OII -1.3%.
    Dec. 9, 2016, 5:35 PM
  • Dec. 6, 2016, 5:41 PM
    • Junk-rated energy companies are rushing to the U.S. bond market at the fastest pace in nearly two years, Reuters reports, in a bid to refinance debt following a sharp rally in spreads over the past week.
    • Parsley Energy (NYSE:PE) and Chesapeake Energy (NYSE:CHK) are pricing deals today (I, II) and follow a bond from Cheniere Energy (NYSEMKT:LNG) yesterday which was increased to $1.5B from $1B on strong demand; Rowan (NYSE:RDC) and Matador Resources (NYSE:MTDR) also are marketing deals (I, II).
    • Since OPEC's Nov. 30 production cut announcement, junk-rated energy bond spreads have tightened by 71 bpa to 483 bpa over U.S. Treasurys as of Monday's close, marking the lowest level since October 2014.
    • The five borrowers coming to market this week could sell $3.4B of junk-rated bonds, which would mark the highest weekly volume for the energy sector since March 2015.
    Dec. 6, 2016, 5:41 PM | 15 Comments
  • Nov. 30, 2016, 2:30 PM
    • Oil and gas names continue to surge following the news that OPEC will cut production.
    • Among the 36 energy stocks in the benchmark SPDR Energy ETF, 13 are up by at least 10%: MRO +21.6%, RIG +19.6%, MUR +15.7%, DVN +15.2%, NFX +15.2%, HES +14.8%, APC +13.6%, HAL +13.6%, CXO +11.3%, XEC +10.9%, EOG +10.5%, COP +10.4%, CHK +10%.
    • Continental Resources (CLR +23.6%) soars to a 52-week high, making founder and CEO Harold Hamm, already the wealthiest U.S. energy billionaire, another $3B richer.
    • Offshore drillers are broadly sporting double-digit gains: ESV +24.8%, ATW +20.6%, RIGP +18.7%, SDRL +16.5%, DO +15.7%, RDC +15%.
    • "For all E&P stocks, this is a bullish call for sure, because price is directly correlated with cash flow," says Luana Siegfried, energy equity research associate at Raymond James, which sees U.S. crude reaching $60/bbl by year-end.
    • MarketWatch's Philip van Doorn writes that pending earnings estimate increases from analysts ought to set a floor under the energy sector and support even higher prices for oil stocks.
    Nov. 30, 2016, 2:30 PM | 75 Comments
  • Nov. 29, 2016, 7:58 AM
    Nov. 29, 2016, 7:58 AM
  • Nov. 21, 2016, 7:42 AM
    • Rowan Cos. (NYSE:RDC) says it is forming a 50/50 joint venture with Saudi Aramco to own, operate and manage offshore drilling rigs in Saudi Arabia.
    • RDC says it will contribute three of its jack-up drilling rigs and Saudi Aramco will contribute two of its jack-up drilling rigs to the JV, and RDC will contribute an additional two jack-up rigs as it completes current Saudi Aramco contracts in late 2018; the new company also will manage the operations of five RDC jack-up rigs currently in Saudi Arabia until their drilling contracts expire.
    • The new company is expected to begin operations in Q2 2017.
    Nov. 21, 2016, 7:42 AM
  • Nov. 1, 2016, 6:52 AM
    • Rowan (NYSE:RDC): Q3 EPS of $0.30 beats by $0.31.
    • Revenue of $379.4M (-30.4% Y/Y) beats by $17.02M.
    • Press Release
    Nov. 1, 2016, 6:52 AM
  • Oct. 31, 2016, 5:30 PM
  • Oct. 19, 2016, 12:48 PM
    • Rowan (RDC +3.2%) is on the rise following its latest fleet status report, part of which includes news that the Rowan Gorilla V jack-up rig was awarded a contract extension from Total in Norway of eight months plus a six-month option.
    • Additionally, Rowan Reliance customer Cobalt Energy agrees to pay $96M in exchange for the right to terminate the contract as early as March 31, 2017, and Rowan Gorilla VI customer ConocoPhillips plans to terminate the contract for convenience at the end of 2017, and then will pay a $250K dayrate for the remaining term of the contract through March 2018.
    Oct. 19, 2016, 12:48 PM | 1 Comment
  • Sep. 16, 2016, 8:27 AM
    • Cobalt Energy (NYSE:CIE) says it is cutting short its long-term contract for a Rowan (NYSE:RDC) drillship after it wraps up work at its North Platte-4 appraisal well in the Gulf of Mexico.
    • The drilling contract, originally scheduled to end on Feb. 1, 2018, instead will terminate on March 31, 2017, while maintaining the current $582K dayrate.
    • CIE also agrees to pay $96M to RDC and commits to use RDC as its exclusive provider of global drilling services for five years.
    Sep. 16, 2016, 8:27 AM
  • Aug. 25, 2016, 12:27 PM
    • Transocean (RIG +1.4%) is upgraded to Neutral from Sell with an $11 price target at Citigroup, which says RIG has exceeded expectations for cost reductions while the backlog remains superior to peers.
    • Citi says that while RIG's EBITDA should steadily decline, the company does not face an EBITDA cliff unlike some peers, and the company also was able to issue debt which has lowered bond yields.
    • Among offshore drillers, Citi rates Ensco (ESV +0.1%), Diamond Offshore Drilling (DO +0.1%), Noble Corp. (NE -0.6%), Atwood Oceanics (ATW -1.4%), Rowan (RDC -0.6%) and RIG at Neutral, while Pacific Drilling (PACD -2.7%) remains rated a Sell.
    Aug. 25, 2016, 12:27 PM | 47 Comments
  • Aug. 12, 2016, 5:30 PM
    • It's still too early to get involved in offshore drillers, RBC analysts say as they expect the group to continue to underperform through 2017 with the supply overhang requiring years to balance out.
    • The firm says drillers will need to continue the current pace of rig retirements and retire an additional ~110 rigs by 2020 to balance the market, another 70 retirements are still needed to balance the floater market, and the jackup market will need ~40 additional retirements over the next four years to reach mid-cycle equilibrium by 2020.
    • RBC cuts its price targets for Transocean (NYSE:RIG) to $11 from $14, Diamond Offshore (NYSE:DO) to $23 to $29, Atwood Oceanics (NYSE:ATW) to $11 from $14, Rowan (NYSE:RDC) to $16 from $22, and Noble Corp. (NYSE:NE) to $8 from $11.
    Aug. 12, 2016, 5:30 PM | 96 Comments
  • Aug. 2, 2016, 1:42 PM
    • After adjusting for the Relentless termination fee, Rowan (RDC -8.2%) missed revenue estimates, according to Citi's Scott Gruber. While the stock is "cash flow king" among the offshore drillers and has one of the highest quality fleets, its backlog is quickly fading and the Cobalt contract remains a concern. The risk/reward "is still not appealing," he says, keeping the rating at Neutral.
    • Adjusted for items, Atwood Oceanics beat wasn't quite as impressive as the headline suggests, according to Credit Suisse's Gregory Lewis. While it was a good quarter, he sees "clouds gathering." Finding work in the oversupplied Gulf of Mexico will be challenging, says Lewis, and the Condor contract is up in Q4.
    • Transocean (RIG -3.2%) continues to sell off following its deal to buy Transocean Partners (RIGP -2.8%), but earnings are due tomorrow. RBC's Kurt Hallead sees EPS of $0.04 vs. consensus of $0.00, but revenue of $896M falling short of the Street at $923M.
    • Also at work ... the price of oil is down 1.7%, and has again slipped below $40.
    • Source: Ben Levisohn in Barron's
    Aug. 2, 2016, 1:42 PM
  • Aug. 2, 2016, 7:04 AM
    • Rowan (NYSE:RDC): Q2 EPS of $0.75 misses by $0.06.
    • Revenue of $611.9M (+20.3% Y/Y) beats by $122.68M.
    Aug. 2, 2016, 7:04 AM