Fri, Sep. 9, 10:58 AM
- Seadrill Partners (SDLP -6.8%) is downgraded to Underperform from Market Perform at Wells Fargo, which says "continuing risks ranging from counterparty/rollover risks to credit/covenant/cross default risks make any case for residual value thesis for the equity difficult."
- Wells says that while SDLP’s liquidity/leverage is in good shape for now, tangible risks to its cash flow combined with covenant requirements for term loan B makes an eventual covenant breach a likely scenario in late 2017 or early 2018.
- The firm also notes the risk of cross default from parent Seadrill remains on the table, as SDLP has two facilities – West Vela and West Polaris - with cross defaults with the parent; even as SDLP continues to build cash, Wells thinks there’s likely a long line of claims for that cash almost all of which is senior to common unit holders.
Fri, Sep. 9, 9:17 AM
Thu, Aug. 25, 8:04 AM
Tue, Jul. 26, 1:00 PM
Tue, Jul. 26, 12:48 PM
Tue, Jul. 26, 11:33 AM
- Seadrill Partners (SDLP -28.9%) sinks after cutting its quarterly distribution to $0.10/unit from $0.25, citing the increase in the extended standby rate period for the West Capricorn rig and the termination of the drilling contract for the West Capella.
- SDLP says it still has an average contact term of 2.7 years, total contract backlog of $3.4B and 64% of its rigs on contract until 2018, despite some contract cancellations.
- Morgan Stanley downgrades SDLP, as well as Transocean Partners (RIGP +0.2%), to Equal Weight from Overweight on valuation and its view that floater and jackup utilization could plummet to levels witnessed in the 1980s as offshore drilling headwinds persist.
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%.
Thu, May 26, 9:18 AM| Thu, May 26, 9:18 AM | 1 Comment
Thu, May 26, 8:34 AM
Mon, May 16, 9:16 AM
- Seadrill Partners (SDRL, SDLP) says Exxon Mobil (NYSE:XOM) cancelled a contract for its West Capella drillship, one of its most lucrative drillship charters at a $627.5K dayrate.
- However, SDLP will receive a ~$125M payment plus other direct costs incurred as a result of the early termination.
- The West Capella had been working in Nigeria in the Usan field but now will be marketed for new work, SDLP says.
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
Wed, Mar. 9, 9:15 AM
- Gainers: LINE +27%. ATSG +24%. REXX +21%. DNR +19%. CRC +17%. BUFF +14%. LNCO +14%. BIOC +14%. SXE +14%. CJES +14%. SGY +14%. BETR +11%. AMRN +10%. BTE +9%. DANG +9%. BCEI +8%. GGB +7%. WLL +7%. SDLP +7%. EXPR +7%. CLF 6%. PBR 6%. CHK 6%. PBR.A 5%.
- Losers: SDRL -13%. DSX -9%. BPT -9%. GRPN -5%. PLNT -5%. YELP -5%.
Thu, Feb. 25, 8:23 AM
- Seadrill Partners (NYSE:SDLP): Q4 Net Income of $96.2M.
- Revenue of $467.2M (+22.8% Y/Y) beats by $49.17M.
- Shares +2.84% PM.
Tue, Jan. 26, 9:22 AM
Tue, Jan. 26, 9:11 AM| Tue, Jan. 26, 9:11 AM | 3 Comments
Dec. 18, 2015, 10:42 AM
- Seadrill Partners (SDLP +8%) is sharply higher despite reducing its quarterly distribution to $0.25/unit, down from the current $0.5675, saying the move will provide significant flexibility to manage its medium term obligations and reduce leverage.
- SDLP expects the cut to increase liquidity by more than $250M/year, and says it will continue to set aside cash reserves for ~$200M/year in maintenance and replacement capex.
- SDLP is downgraded to Neutral from Buy at Seaport Global, saying continued pressure on commodities and reduced spending plans of its customers have reduced the company's ability to blend and extend contracts for its rigs as contracts start rolling off in 2017.
- Seadrill Corp. (SDRL -1.1%) owns 35% of SDLP.