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Pacific Drilling SA (PACD)

- NYSE
  • Tue, May 19, 11:49 AM
    • Offshore drilling contractors are sharply lower across the board after Transocean's (RIG -5.1%) latest fleet status update showed the company has idled three more deepwater rigs, bringing its number of out-of-work units to 15.
    • RIG said its deepwater floater Marianas joined the idle fleet along with the Celtic Sea and M.G. Hulme Jr., pushing the idle fleet count to nine rigs.
    • The Development Driller II, GSF Rig 140 and Sedco Express were extended by an average of ~80 days but at reduced dayrates; Development Driller II was extended at $315K/day for 100 days, GSF Rig 140 suffered a 40% dayrate reduction to $156K for 120 days, and Sedco Express was extended for 18 days with no rate change.
    • Credit Suisse reiterates its Underperform rating with $12 price target, and Cowen maintains its Market Perform rating and $14 price target.
    • Also: SDRL -5%, NE -3.6%, ESV -3.6%, RDC -4.2%, DO -4.7%, ATW -3.4%, PACD -6.1%.
    | 23 Comments
  • Thu, May 7, 5:25 PM
    • Transocean (NYSE:RIG) ripped through its Q1 earnings estimates but shares fell 3.6% in today's trade, swept away along with most other energy companies as U.S. crude oil prices tumbled back below $60/bbl.
    • But some analysts say RIG could have been the victim of a classic case of "buy the rumor, sell the news" after shares had gained 40% since March 13 heading into earnings.
    • Analysts at Clarkson Capital believe RIG has "received more than enough credit over the past month to account for solid operational performance in Q1," urging investors not to chase the stock at current levels.
    • Cowen's J.B. Lowe thinks today’s price action was "an awareness that there are no other major drillers to report upside earnings surprise (except Seadrill)... and that the recent run up in share prices has been too much too quickly."
    • Other oil drillers also finished broadly lower: RIGP -4.3%, SDRL -6.8%, NE -6.6%, DO -4.6%, ESV -6.1%, RDC -2.9%, ATW -5.8%, PACD -8.7%.
    | 16 Comments
  • Wed, May 6, 3:18 PM
    • Pacific Drilling (PACD -3.7%) reported strong Q1 earnings on Monday, prompting Cowen analysts to maintain their Outperform rating on its shares but they also say PACD's relationship to Chevron (CVX -0.5%), once a positive, might have become a risk.
    • PACD is now overly-reliant on its CVX backlog, with four of PACD’s five working rigs contracted to CVX (the fifth is working for Total) in either the Gulf of Mexico or Nigeria, the firm says; also, the newbuild Pacific Meltem is currently available for work in the Gulf of Mexico and actively being bid for CVX’s two-year tender in the region.
    | 4 Comments
  • Tue, May 5, 2:35 PM
    • Diamond Offshore (DO +5.9%) is surging a day after reporting better than expected Q1 results due to a lower tax rate for the quarter after adjusting for impairments and restructuring charges, but Susquehanna analysts refuse to jump on the bull train.
    • The firm cuts its 2015-16 EPS estimates to $1.95 and $0.01 from $2.18 and $0.09 to reflect lower revenues based on expected dayrates and utilization, as DO indicated that its outlook is expected to be worse for the remainder of 2015 and is showing the first signs of leading edge rigs becoming un-contracted as they roll off.
    • Despite cost-cutting measures DO and other offshore drillers have taken to offset lower utilization, the firm believes dayrates and activity levels still have room to go lower.
    • But with oil price strength today, DO and other offshore drillers are moving higher: SDRL +10.2%, RIG +4.2%, ESV +3.1%, RDC +4.5%, ATW +4.5%, NE +1.9%, PACD +6.8%, HERO +6.5%.
    | 7 Comments
  • Mon, May 4, 5:10 PM
    • Pacific Drilling (NYSE:PACD): Q1 EPS of $0.24 beats by $0.06.
    • Revenue of $283.4M (+25.6% Y/Y) beats by $1.2M.
    • Press Release
    | 7 Comments
  • Sun, May 3, 5:35 PM
  • Tue, Apr. 28, 11:31 AM
    • Contract cancellations are the biggest risk for offshore drillers, according to Cowen analysts, who expect backlog quality will comprise the sector's main focus this earnings season.
    • With operators cancelling contracts for convenience or by using an unforeseen event to eliminate backlog from the end of contracts, even signed contracts have been shown to be at risk to cancellation, and Cowen expects operators will continue to seek ways to get out of existing contracts or amend current contracts to more favorable terms wherever possible.
    • "The incremental, unforeseen loss of backlog from existing contracts will likely drive further estimate reductions and share price weakness across the group," the firm says.
    • Relevant tickers: SDRL, ATW, ESV, RIG, RDC, DO, NE, PACD, PKD.
    | 35 Comments
  • Tue, Apr. 21, 11:48 AM
    • Raymond James doubles down on its negative outlook for offshore drilling contractors, as the firm cites the lack of new contracts and the need for a much more significant move in oil prices to materially change the sector's landscape.
    • The firm says the current contracting rate trends well below its expected pace and even below 2009 levels as the desire to pursue further activity skids to a halt, and believes that 2016 consensus estimates have substantial room for downward earnings revisions; including contract cancellations, the sector actually experienced negative incremental demand during the Q1.
    • Raymond James sees the average offshore rig count declining by 13% in 2016 and a further 4% in 2017; even with cost-cutting efforts, it expects the average uncontracted rig to lose money as leading edge dayrates will flirt with risked breakeven levels with only minimal recovery in the next two years given the levels of excess supply.
    • Offshore drillers are lower today: ORIG -5.8%, RIG -4.5%, SDRL -4.1%, NE -2.8%, ESV -2.8%, DO -2.1%, ATW -2.1%, PACD -2%, RDC -1.9%.
    | 13 Comments
  • Fri, Apr. 17, 11:46 AM
    • Transocean's (RIG -2.3%) rigs are "dropping like flies," Credit Suisse says as it reiterates its Underperform rating and $12 stock price target after RIG's latest fleet status report revealed it had a contract terminated early and had decided to scrap yet another rig.
    • RIG's scrapping of the GSF Explorer, which last worked in November 2014 at $412K/day, boosts the number of floaters the company intends to scrap to 19, up from 11 at the end of 2014; early termination of the Sedco Energy raises RIG’s idle floater count to six.
    • RIG expects scrapping the GSF Explorer will result in a Q2 non-cash charge of $100M-$120M.
    • Offshore drilling contractors are broadly lower, particularly Atwood Oceanics (ATW -4.1%) after Chevron shortened its contract term for one of its drilling units; also DO -2.2%, PACD -2.1%, NE -1.5%, ESV -0.6%, RDC -0.2%, SDRL +0.3%.
    | 14 Comments
  • Thu, Apr. 16, 10:58 AM
    • Ensco (ESV -4.8%) reveals in its April fleet status report that it agreed to lower dayrates on seven of its jackups working for Saudi Aramco in the Middle East, with reductions ranging 10%-20% and an average decline of 15% across the seven rigs.
    • Cowen analysts believe further rate negotiations are ongoing and could affect other operators with units contracted to Saudi Aramco, noting that Rowan (RDC -4.2%) may be the most exposed since it has nine rigs currently working with Aramco; RDC secured three-year contract extensions in Sept. 2014 on four of the jackups, which could see reductions, as well as four units currently under negotiation extensions.
    • Other contractors with units working for Aramco are Noble Corp. (NE -4.9%) with four units, Hercules Offshore (HERO -3.9%) with two (after the termination of the Hercules 261), and Seadrill (SDRL -3.9%) with three.
    • Other offshore drilling contractors also are lower: RIG -3%, ATW -2.3%, DO -4.1%, HP -2.7%, ORIG -2.5%, PACD -4.2%.
    | 14 Comments
  • Thu, Mar. 19, 2:26 PM
    • It's a rough day for offshore drilling contractors following Transocean's (RIG -7.1%) announcement last night that it will scrap four rigs and stack four more it previously had idled, taking a $300M-$325M charge.
    • Most notably, the Deepwater Expedition, which was working for $650K/day in 2014, will be scrapped; overall, the number of rigs the company plans to scrap is now 16, with possibly more to come.
    • RIG was awarded a $300K/day contract for one rig for work off the coast of Nigeria, and idles another rig.
    • In cutting its stock price target to $16 from $17, RBC expects just 10%-20% of available rig days will be contracted eventually given current market conditions vs. Wall Street expectations for ~35%.
    • Also: ESV -4.3%, NE -5.3%, RDC -0.6%, DO -3.1%, SDRL -2.4%, ATW -5.7%, PACD -4.5%, HP -1.8%.
    | 20 Comments
  • Tue, Mar. 3, 12:32 PM
    • In a discussion of big energy companies cancelling contracts with offshore drillers, Credit Suisse analyst Gregory Lewis notes that national oil companies such as Petrobras sometimes end deals for the sake of convenience, and that drillers with lots of exposure to state-run companies are vulnerable.
    • Most drillers have a core customer: Lewis says Shell (RDS.A, RDS.B) comes to mind for Noble Corp. (NYSE:NE) with ~47% of 2015 backlog and Chevron (NYSE:CVX) for Transocean (NYSE:RIG) with ~15% of 2015 backlog.
    • But among those with the most exposure to national oil companies on their 2015 contracted revenues, Lewis says Diamond Offshore (NYSE:DO), Seadrill (NYSE:SDRL) and Ensco (NYSE:ESV) are at the top, while Pacific Drilling (NYSE:PACD) and Atwood Oceanics (NYSE:ATW) have none.
    | 20 Comments
  • Thu, Feb. 26, 2:32 PM
    • Offshore drillers are warning that the number of deepwater rigs stacked or scrapped is set to hit a two-decade high, and predicting that the industry slump caused by lower crude oil prices could last another two years.
    • Seadrill (SDRL -2.2%) said today that the severity of the downturn and extent of oversupply was such that ~25% of the rigs would come available for hire this year, and that industry decisions regarding the cold stacking and scrapping of older units likely would accelerate to levels not been seen in two decades (Q4 earnings).
    • Transocean's (RIG -1%) Q4 results were not as bad as expected, but Senior VP Terry Bonno warned today that the company “continue(s) to expect challenging conditions... [with] extended periods of inter-contract idle time and significant competition for the limited tendering opportunities available."
    • Dayrates for advanced, deepwater rigs have tumbled from a peak of ~$650K two years ago to $350K-$400K, with contractors slashing prices in the face of dwindling exploration.
    • Also: ESV -7.3%, RDC -3.4%, DO -4.3%, ATW -5.1%, PACD -9.1%, HERO -13.6%.
    | 17 Comments
  • Wed, Feb. 25, 10:19 AM
    • Petrobras (PBR -8.3%) plunges in early trading after Moody's downgraded the heavily indebted company's long-term debt to a junk Ba2 rating from Baa3 with a negative outlook.
    • Brazil's finance minister reportedly made a last-minute attempt to the rating agency to try to reverse the decision, offering a guarantee that the government would support the company if necessary.
    • "The main concern now will be another cut to junk by Fitch or S&P, which could lead the company’s bonds to be sold by many institutional investors," says the head of fixed income at Andbanc Brokerage.
    • Separately, PBR reportedly will not renew leases on at least four drilling rigs from Seadrill (SDRL +0.2%), Pacific Drilling (PACD -2.2%) and Diamond Offshore (DO -1.6%) that have been under negotiation since last year; DO already had disclosed the cancellation in its latest 10-K, and SDRL recently warned that contract extensions with PBR likely would fail.
    | 19 Comments
  • Tue, Feb. 24, 2:22 PM
    • Offshore drillers are sinking again after Diamond Offshore (DO -8.3%) disclosed that it probably would lose some contracts; also, Transocean Partners (RIGP -7.5%), the MLP created by Transocean (RIG -1.9%), was downgraded to Underweight with a $16 price target, cut from $26, at Barclays.
    • RIGP, which is set to release Q4 results tomorrow after the close, is not at risk of cutting its dividend but faces uncertainty in light of lowered demand for offshore drilling rigs, Barclays says, but that RIGP likely would not be able to increase its distribution if the semi-submersible DDIII were to begin operating at recently observed market rates.
    • DO is reiterated at a Sell rating with a $23 price target at Deutsche Bank.
    • Also: SDRL -2.7%, SDLP -2.8%, ESV -6.5%, RDC -4.3%, NE -4.7%, ATW -5.8%, PACD -5.2%.
    | 19 Comments
  • Mon, Feb. 23, 5:58 AM
    • Pacific Drilling (NYSE:PACD): Q4 EPS of $0.32 beats by $0.03.
    • Revenue of $319.74M (+59.4% Y/Y) beats by $7.49M.
    • Press Release
    | 3 Comments
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Company Description
Pacific Drilling SA is an international offshore drilling contractor committed to becoming the preferred provider of ultra-deepwater drilling services to the oil and natural gas industry through the use of high-specification rigs.