Seadrill Partners: Q3 Results Show Potential Of Fast Growing MLP
Power Hedge • 10 Comments
Power Hedge • 10 Comments
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, 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
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.
Dec. 18, 2015, 9:15 AM
Dec. 11, 2015, 12:47 PM
Dec. 8, 2015, 12:58 PM
- Seadrill (SDRL -5.5%) and Seadrill Partners (SDLP -8.9%) are sharply lower after securing one year contract extensions for a pair of rigs offshore Thailand with Chevron but at reduced dayrates.
- The dayrates of both drilling units are negotiated down from their current $127K, with the new rates backdated to Oct. 1, 2015; the total backlog of the current contracts is reduced by $35M.
Jun. 17, 2015, 8:11 AM
- Seadrill (NYSE:SDRL) +1.5% premarket after agreeing to sell the West Polaris ultra-deepwater drillship to Seadrill Partners (NYSE:SDLP) in an apparent move to reduce its balance sheet risk and generate cash as its profitability has been squeezed.
- Total consideration is comprised of $204M in cash and $336M of debt outstanding under the existing facility financing the West Polaris; the balance will be funded with a $50M seller's credit due in 2021 that carries an interest rate of 6.5%/year.
- Through the sale, SDRL is able to realize $204M in cash upon closing while retaining up to $203K/day in revenues under the current drilling contract without the associated operating expense.
Apr. 27, 2015, 11:39 AM
- Seadrill (SDRL +2.8%) moves higher even as shares are downgraded to Sell from Neutral with a 20%-plus downside at Citigroup, which sees SDRL breaching debt covenant levels in 2016 with risks in 2015 if contracts are renegotiated.
- While a waiver likely will be renegotiated in the short term, the firm sees SDRL's financing picture becoming more difficult, especially in the context of financing new deliveries and refinancing of existing debt.
- Despite a 40% drop in spot deepwater floater dayrates over the last 12 months, Citi sees a potential for another 30% fall before the cycle bottoms; for SDRL, at least 40% of the fleet is uncontracted in 2016, and Citi sees downside risks to both earnings as well as the market’s and lenders’ valuation of the fleet as more units become idled.
- SDLP +2.8%.
Seadrill Partners LLC owns, operates and acquires offshore drilling rigs. It intends to grow in the offshore drilling market by continuing to provide service to the customers with its modern, technologically advanced fleet. It also intends to leverage the relationships, expertise and reputation... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United Kingdom
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