Today, 1:53 PM
- Transocean (RIG +1.2%) is upgraded to Equal Weight from Underweight with a $12 price target, up from $10, at Morgan Stanley, which says cost-control efforts continue to bear fruit, prompting positive EBITDA accretion of $600M in 2016 alone and an improved liquidity position as a result.
- Oil States (OIS +0.2%) also earns a Stanley upgrade, to Overweight from Equal Weight with a $53 price target, up from $40, predicting a meaningful recovery in offshore production equipment orders over the coming quarters coinciding with improved onshore related earnings; thus the firm sees OIS reversing its underperformance relative to its North American pure play peers.
- However, the firm also downgrades Atwood Oceanics (ATW -1.4%) to Equal Weight from Overweight on valuation.
Yesterday, 2:58 PM
- "No news is still good news" at Transocean (RIG -0.4%), Citi's Scott Gruber writes after the company issues its latest fleet status update, highlighting the previously announced contract on the Transocean Barents and easily termination on the Discover India, a new contract on the Sedco 712, and tweaks to other contracts.
- "News that isn't negative can be considered positive at this stage in the cycle," according to Gruber, given RIG's improved EBITDA generation (~$100M added vs. prior estimates), several contract extensions that saved rigs from stacking earlier in Q3, and the likely scrapping of three more midwater floaters.
Mon, Oct. 17, 2:17 PM
- Transocean's (RIG +0.3%) 17K-ton oil drilling rig that ran aground off the Scottish coast more than two months has finally departed its anchorage en route to Malta.
- The Transocean Winner rig ran aground at Dalmore Bay on the Isle of Lewis in a storm in early August while being towed to Malta, was refloated after three weeks and anchored at Broad Bay before being put on board a heavy lift ship ship used for transporting large maritime structures over long distances.
- Turkish authorities had to provide the documentation that will allow the drilling rig to eventually be taken to a yard in Turkey where it will be scrapped.
- Investigations found two of the rig's four fuel tanks were damaged in the incident, but most of the fuel that was spilled likely has evaporated with no damage to the environment.
Tue, Oct. 4, 3:54 PM
- Transocean (RIG -3.4%) is upgraded to Sector Outperform from Sector Perform with a $14 price target, raised from $12, at Scotia Howard Weil, but shares nevertheless extend yesterday's sharp loss after Reliance Industries terminated its deal for the Discover India drillship four years early.
- In its upgrade, Weil says that after spending time with management its thesis on the stock remains that RIG provides the best trade in a deepwater recovery; given the recent updates on the global oil macro environment along with some company specific catalysts, the firm thinks it is time to get involved in the stock.
Mon, Oct. 3, 2:55 PM
- Transocean (RIG -7.3%) is sharply lower after news that Reliance Industries exercised an option to terminate its contract for the Discover India ultra-deepwater drillship more than offsets the impact of a new 15-month contract with Suncor for work off the Canadian coast starting next year.
- RIG will receive a $160M lump sum fee because of the cancellation, effective in December, or slightly more than four years before the January 2021 end date called for in the original contract; the dayrate had been set at $508K.
- Reliance had exercised a contract for the drillship from September 2013 until September 2016 in the Gulf of Mexico at a $528K dayrate.
Mon, Oct. 3, 8:06 AM
- Transocean (NYSE:RIG) says it Barents ultra-deepwater rig was awarded a 15-month contract at a $260K dayrate with Suncor Energy (NYSE:SU) for work off Canada.
- RIG expects the rig to begin operations in Q3 2017, and estimates contract backlog at $119M.
- Separately, attempts to load the Transocean Winner drilling rig onto a transport ship away from the site where it ran aground in Scotland have been postponed due to bad weather.
Wed, Sep. 28, 6:21 PM
- Transocean (NYSE:RIG) -0.6% AH after Carl Icahn cuts his stake in the company to 1.5% from 5.88%, according to an SEC filing.
- Icahn says CEO Jeremy Thigpen and RIG management "have done an outstanding job given the challenging environment," but he reduced his position to recognize a capital loss for tax planning purposes, the same reason he offered last week in cutting his stake in Chesapeake Energy.
- Icahn now owns ~5.48M shares, vs. ~21.48M held at the end of the June quarter.
Thu, Sep. 15, 3:58 PM
- Transocean (RIG +1.6%) is higher after Canaccord Genuity upgrades shares to Hold from Sell with a $9 price target, although the firm continues to view offshore drillers in a negative light as the industry faces acute overcapacity.
- In the current landscape, Canaccord says RIG stands out as one of the best funded companies in the sector, with an asset base that has been adequately invested with some recent acquisitions, and a "rock solid" balance sheet.
- "Given our long-standing negative view on the sector, we look for opportunities in offshore drilling that are value- and sentiment-driven," the firm writes, seeing RIG's current share price as a "realistic assessment of its position."
Thu, Aug. 25, 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.
Tue, Aug. 23, 9:19 AM
- Transocean (NYSE:RIG) has carried out a successful refloat of its Transocean Winner drilling rig that has been grounded on the Isle of Lewis off Scotland for the past two weeks.
- The 17K-ton rig is being towed to an area ~50 miles away where experts will assess its condition after two of its four fuel tanks were damaged when it ran aground.
- The rig could remain until mid-September to allow for repairs and a decision on its final destination.
Mon, Aug. 22, 12:32 PM
- Transocean (RIG -3.8%) will attempt to refloat the Transocean Winner drilling rig from its location off a Scottish island today after a salvage team successfully transferred most of the remaining diesel on board to minimize the pollution risk.
- Weather and sea conditions have now improved sufficiently to facilitate the long-awaited refloat, with the leader of the salvage team saying that an attempt would be made on the high tide at ~10 pm local time on Monday.
- The rig has been stranded on rocks at Dalmore Bay on the western shore of the Isle of Lewis since running aground nearly two weeks ago during a failed towing operation in stormy seas.
Mon, Aug. 22, 7:32 AM
- Transocean (NYSE:RIG) late last week filed an S-4 form outlining the planned roll-up of its Transocean Partners (NYSE:RIGP) MLP, which included its base case financial forecast through 2020.
- RIG estimates that it will have 54 operating rigs in 2020 and that EBITDA will total $1.8B this year, but analysts at RBC expect the company to operate 47 rigs while forecasting EBITDA of $2.5B by mid-cycle 2020.
- RBC says the company's EBITDA estimate, which is 26% lower than the firm's expectations, appears to be explained by lower for longer forecasted dayrates and higher operating costs.
- RIG announced earlier this month that it would pay $514M in an all-stock deal for RIGP, in which it would issue ~22.7M new shares.
Fri, Aug. 12, 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.
Wed, Aug. 10, 10:55 AM
- British authorities have launched a probe into how a Transocean (RIG -2.3%) oil rig ran aground in Scotland on Monday, with 280 metric tons of diesel aboard, after rough weather caused the rig to disconnect from a tugboat.
- A team of salvage experts has been airlifted onto the stricken rig amid severe weather that is hampering the operation.
- While the risk of pollution from the incident is considered low, there are growing environmental concerns after a thin sheen of diesel appeared on waters in a nearby cove and plants on the beach were covered in a black substance, indicating a possible leak from the 1983-built rig.
Mon, Aug. 8, 10:10 AM
- A Transocean (RIG +2.5%) drilling rig has run aground off the west coast of Scotland after breaking free from a tug boat amid strong winds.
- The semi-submersible rig was being transported from Norway to Malta when the tow line broke and it was pushed aground off the Isle of Lewis; the company says no personnel are on board and there is no risk to life.
- The Transocean Winner rig reportedly was set to be scrapped after its $498K/day contract with Det Norske Oljeselskap expired last month, which would make it the first Norway-compliant floater to head for the scrapyard.
Wed, Aug. 3, 6:56 PM
- Transocean (NYSE:RIG) +1.9% AH after reporting better than expected Q2 earnings and revenues, even as the latter result was chopped in half from a year ago.
- Lower expenses appear responsible for the Q2 beat, as RIG says total expenses totaled $767M, down 17% Q/Q, and that it eliminated $1 out of every $4 in operating and maintenance costs to ~$500M during the quarter.
- RIG's utilization fell to 47% in Q2 from 51% in the previous quarter and 75% in the year-ago period; contract backlog fell to $13.7B as of the July fleet status report, from $14.6B in April.
- Transocean Partners (NYSE:RIGP), which is being bought out by RIG, also reports a Q2 earnings beat, and says its $95M in Q2 cash flows from operating activities rose from $78M in Q1.