Thu, Apr. 9, 6:36 PM
- Halcon Resources (NYSE:HK) bonds rallied today after the company said two investment funds advised by Franklin Templeton Investments agreed to a debt-for-equity swap.
- The funds will exchange $116.5M in principal of the 9.75% bonds maturing in 2020 for 66.5M HK common shares; the notes rose as much as $0.0375 on the dollar to yield 15.4% today in heavy volume.
- The swap, which will reduce HK's debt, is expected to close this month, and comes after the company last month announced a $150M equity offering.
- Franklin will become the second largest publicly disclosed stake in HK shares, according to Bloomberg; Franklin is among the largest publicly disclosed holder of bonds for offshore drillers including Hercules Offshore (NASDAQ:HERO) and Vantage Drilling (NYSEMKT:VTG).
Tue, Mar. 24, 11:31 AM
- FBR cut its stock price targets on oilfield services firms Rowan (RDC -1.2%), Ensco (ESV -0.6%), Diamond Offshore (DO -4.4%) and Vantage Drilling (VTG +0.6%), as utilization rates look "deceptively healthy" and on par with 2014 year-end levels, but the average jack-up contract length signed this year is for an average of only 199 days per rig vs. an average 438 in 2014 and 467 in 2013.
- In floaters, the firm says current utilization of 89% vs. 90% at the end of 2014, with ultra-deepwater rigs holding at 89%, but numbers could fall sharply in the next few months, as up to 24 new floaters could enter the market in 2015 and existing contracts for active rigs continue to be exposed to early terminations.
- FBR believes RDC offers an attractive risk/reward profile to patient investors, given the driller's portfolio dominated by the world's largest high-spec jackup fleet and four state-of-the-art ultra-deepwater drillships, as well as the highest probability takeout in the space; nevertheless, the firm cuts its price target to $30 from $36.
- On the other end, the risk of contract re-negotiations and older rig withdrawals keeps FBR more skeptical about the short- and medium-term prospects of drillers like ESV and DO, and they believe that highly leveraged, pure-play names like VTG remain the most exposed to further macro deterioration.
Fri, Mar. 6, 4:41 PM
- Vantage Drilling (NYSEMKT:VTG) says it plans to extend purchases of its own debt at steep discounts this year as a way to save on interest costs, and expects $10M-$12M in gains during Q1 from what it already bought and retired early.
- Without putting more rigs under contract, "I need to maintain liquidity because that asset will not be contributing to cash flow,” CFO Douglas Smith said on today's earnings conference call.
- Rig owners such as VTG are confronting a glut of new vessels at a time customers are canceling work because of falling crude prices.
Fri, Mar. 6, 6:01 AM
Thu, Mar. 5, 5:30 PM
Fri, Feb. 13, 2:44 PM
- It’s not just Seadrill (SDRL -4.7%) - Transocean (RIG +2.3%), Diamond Offshore (DO +1.2%) and others also have rigs working for Petrobras (PBR +5.9%), but analyst Lenny Zephirin is not particularly concerned.
- SDRL said earlier that it was removing $1.1B worth of Petrobras orders from its backlog due to the ongoing corruption scandal affecting the Brazilian company.
- RIG, DO, Ocean Rig UDW (ORIG +0.8%), Paragon Offshore (PGN -1.8%) and Vantage Drilling (VTG -4.4%) all have ultra-deepwater rigs working for PBR, and Zephirin believes those rigs "are not affected."
- The move reflects mostly on the troubles at PBR, the analyst says, perhaps suggesting the company is "losing discipline around their long-term drilling plan."
Tue, Feb. 3, 12:57 PM
- Zephirin Group’s Lenny Zephirin upgrades Seadrill (SDRL +9.3%), Noble Corp. (NE +4.4%) and nearly every other offshore driller in the firm's coverage, citing a significant change in market sentiment as mounting doubt of a recovery of oil prices that had held down share prices of offshore drillers reverses.
- SDRL and Hercules Offshore (HERO +13.1%) are raised to Buy Speculative Risk from Sell, Ocean Rig (ORIG +10.4%) is lifted to Buy High Risk from Sell, NE and Diamond Offshore (DO +0.4%) is upgraded to Hold Speculative Risk from Sell, Ensco (ESV +2.4%) is lifted to Hold High Risk and Vantage Drilling (VTG +8.8%) to Hold Speculative Risk; the already had Buy rating for Transocean (RIG +5.9%) and Rowan (RDC +3.2%).
- Energy stocks are higher across the board as crude oil trades up 4.2% at $51.66/bbl and sits nearly $9/bbl above its January low.
Sun, Jan. 4, 3:49 PM
- The following stocks were the Russell 2000's worst performers in 2014:
- KWK -93.5%. WLT -91.7%. AMZG -89.5%. PHMD -88.2%. EXXI -88%. RGDO -86.8%. REN -85.4%. HERO -84.7%. EOX -84.3%. MCP -94.3%. CVEO -84.2%. BPZ -84.1%. FWM -82.6%. MILL -82.2%. NADL -81.6%. VRNG -81.4%. CYTX -81%. SALT -80.5%. PRKR -80%. MBII -79.7%. NTLS -79.2%. COVS -78.9%. KEG -78.9%. MM 78 MPO -77%. ANR -76.6%. EXEL -76.5%. SZYM -76.3%. CONN -76.2%. ANV -75.5%. GALT -75.5%. ZQK -74.8%. ARO -74.5%. REXX -74.1%. GDP -74%. FUEL -73.8%. QRHC -73.7%. VTG -73.4%. RLOC -73%. XONE -72.2%.
Oct. 31, 2014, 6:03 AM| Comment!
Oct. 30, 2014, 5:30 PM
Aug. 8, 2014, 2:39 PM
- Offshore drillers continue to show some resilience after Transocean (RIG +1.6%) reported solid Q2 earnings, but analysts suggest it's too early for investors to jump in.
- Jefferies analysts still see challenges, in particular for RIG's 5th G fleet as rigs scramble down market/incur idle time; also, the potential for prolonged weakness in the North Sea leads the firm to lower estimates for FY 2016 even as it is "modestly more comfortable" that a broader 2016 recovery could still be in play.
- UBS thinks RIG will have to make the decision to either reduce the dividend or increase its debt by 2015; dayrate already are down 25%-40% from peaks levels, and pressure likely will continue given limited rig demand and fierce competition, and regular dropdown proceeds from the MLP probably will not provide quite enough help for RIG's free cash flow.
- SDRL +2.7%, NE +2.9%, ATW +2.2%, RDC +2.3%, VTG +1.6%,ESV +0.3%.
Aug. 5, 2014, 6:03 AM| Comment!
Jul. 30, 2014, 3:10 PM
- Newfield Exploration (NFX -5.1%) and EXCO Resources (XCO -6.4%) are the latest examples of oilfield services and equipment companies that have sold off despite reporting reasonably healthy quarterly results.
- NFX is sharply lower after Q2 earnings missed expectations but revenues beat estimates and rose 40% Y/Y; it even reported a deal for its Granite Wash assets that would bring in $588M.
- XCO also offered mixed Q2 results - a $0.01 earnings miss with a revenue beat - but said increased capex would not result in significant production volumes until 2015.
- Global Hunter - while also downgrading Natural Gas Services Group (NGS +0.3%) and Vantage Drilling (VTG +0.1%) - thinks the market is showing fatigue in the sector, particularly with positive onshore oil service data points that may no longer seem incremental.
May. 6, 2014, 6:11 AM| Comment!
Feb. 28, 2014, 9:14 AM
Feb. 28, 2014, 6:01 AM| Comment!
VTG vs. ETF Alternatives
Vantage Drilling Co is an international offshore drilling company engaged in contract drilling units, related equipment and work crews, on a dayrate basis to drill oil and natural gas wells for its customers.
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