Ensco - Complete Fleet Status Analysis As Of December 6, 2016 And Commentary

| About: Ensco PLC (ESV)
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Summary

Ensco released its December fleet Status. Overall, many changes as usual, but no increase in contract backlog estimated.

The contract backlog estimated as of today is now $3.6 billion, remains constant from the previous October FSR (3.7 billion).

The company has not shown the first signs of a recovery yet, despite the burst of optimism that has followed the recent decision to cut production by OPEC.

Ensco PLC (NYSE:ESV)

This article is an update of my preceding article about the FSR October 13, 2016.

Ensco fleet status as of December 6, 2016, [click here.]

1. Drillships

# Name

Year

Built

Water Depth Max

K feet

Contract

End

Day rate

K $

Location

Info

0-rate

1

Ensco DS-6

2011

10/12 2/18

485 +102 amort.

Total: 587

[BP]

Egypt

2x1Y option

2

Ensco DS-8

2014

10/12

11/20

From 618 +14 amort.

Total: 632

[Total]

Angola

1 Y option
3

Ensco DS-10

2015

10/12

under constr.

Deferred by 18 months

Q1' 17

Available

South Korea -

2. Semi-Submersibles

# Name

Year

Built

Upg.

Water

Depth

Max

K feet

Contract

End

Day rate

K $

Location

Info.

0-rate

1

Ensco 8505

2012

8.5/10

3/17

Not disclosed(~130k?)

[Deep Gulf Energy]

U.S. GOM

3-wells

0-rate (15d)4Q'16

2

Ensco 6001

2000

5.7 6/18

282

+20 amort.

Total: 302

[Petrobras] Brazil (10d)4Q16
3

Ensco 6002

2001

5.7

12/19

245

+ 17 amort.

Total: 262

[Petrobras] Brazil

Bonus 15% possible

4

Ensco 5004

1982

1.5

1/17

1/17 -7/18

135 + 9

Total: 144

195 + 9

Total: 204

[Mellitha] Mediterranee
5

Ensco 5006

1998/1999

7.5

8/19

362 + 125

Total: 487

[Inpex] Australia

3. Jackups

# Name

Year

Built

Upg

Water Depth Max

K feet

Contract

End

Day rate Location Info.
1

Ensco 123

2016

Ultra-Premium Harsh Environment Water Depth Max: 400'

Under-construction

Delayed 19-month

1Q'18

Singapore -
2

Ensco 122

2014

Ultra-Premium Harsh Environment Water Depth Max: 400'

2/17

3/17-Late 8/17

88 + 14 amort.

115

[NAM/Ithaca]

Nz

(24d)4Q16

1-well option
3

Ensco 121

2013

Ultra-Premium Harsh Environment Water Depth Max: 400'

12/16

Drilling per Rigzone as of today

95

[Wintershall]

Nz

(14d) 2Q'16

+1Y unpriced option

4

Ensco 120

2013

Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'

10/16

122

[Nexen]

U.K.

+ 2x1 well opt.

+ 5x 1 well unpriced opt.

5

Ensco 110

2015

Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'

11/16

83

[NDC]

UAE

2x1Y unpriced opt.
6

Ensco 109

2008

Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'

1/18

172

+13 for mob.

[Chevron]

Angola

(20d) 4Q'16
7

Ensco 108

2007

High Specification, HPHT Capable Water Depth Max: 400' 4/17 162

[PTTEP]

Thailand

+1Y opt.

1Y option
8

Ensco 107

2006

High Specification, HPHT Capable Water Depth Max: 400' 4/17 128

[Chevron]

Australia

+ 6x1 month opt.

1x6m Opt
9

Ensco 104

2002 2011

High Specification, HPHT Capable Water Depth Max: 400'

1/18

1/18-9/18

85 (2-wells)

95

[Wintershall]

UAE

[NDC]?

(30d) 4Q'16

2-year unpriced option

(75d)3Q'16

10

Ensco 101

2000

Heavy Duty, HPHT Capable Water Depth Max: 400'

Late 9/17

75

[ENGIE]

NZ

11

Ensco 100

1987 2009

Heavy Duty, HPHT Capable Water Depth Max: 400'

11/18

185

[Premier oil]

U.K.

12

Ensco 97

1980

Water Depth Max: 250'

12/16

12/16-2/19

69

125

[Aramco]

Saudi Arabia

(21d) 2Q'17

Discussion for 2017 rate

-
13

Ensco 96

1982 2011

Water Depth Max: 250'

12/16

12/16-2/19

65

125

[Aramco]

Saudi Arabia

(60d) 3Q'17

Discussion for 2017 rate

-
14

Ensco 92

1982 1996

Water Depth Max: 225'

1/17

1/17-8/18

95

95

[Conoco

Phillips]

UK

(23d)2Q17

(23d) 2Q'17
15

Ensco 88

1982 2004

Water Depth Max: 250'

12/16-12/19

65

[Aramco]

Saudi Arabia

1Y priced option

(14d) 4Q'16

16

Ensco 87

1982 2006

Water Depth Max: 250'

mid 12/16

42

[Talos]

GoM

17 Ensco 84 Water Depth Max: 250' 12/16 - 8/21 72

[Aramco]

Saudi Arabia

Contract Ensco 94 transfered to rig

18

Ensco 80

1978 2011

Water Depth Max: 225'

1/17

1/17-Late 1/17

138

75

[ENGIE]

U.K.

19

Ensco 76

2000

Special Capabilities: HPHT Capable Water Depth Max: 350'

12/16

12/16-12/18

125

172

[Aramco]

Saudi Arabia

Discussion for 2017 rate

20

Ensco 75

1999

Special Capabilities: HPHT Capable Water Depth Max: 350'

mid 12/16

mid 12/16- mid 1/17

45

45

[Apache/Rooster]

US GoM

21

Ensco 72

1981 2012

Water Depth Max: 225'

Contract preparation

Late 1/17 - Late 8/17

-

65

[ENGIE]

Nz

22

Ensco 71

1982

Water Depth Max: 225'

7/18

95

[Maersk] Denmark

(21d)4Q17

(21d) 4Q'17
23 Ensco 68 Water Depth Max: 400'

Late 12/16

12/16-1/17

1/17-1/17

55

0

62

[Fieldwood/Enven]

US GoM

24

Ensco 67

1976 2005

Water Depth Max: 400'

12/16 - 12/17

52

[Pertamina]

Indonesia

+1Y opt.

25

Ensco 54

Water Depth Max: 300'

12/16

12/16-9/17

92+39

115+39

[Aramco]

Saudi Arabia

Discussion for 2017 rate

1Y priced option

(12d) 1Q'17

26

Ensco 52

1983 2013

Water Depth Max: 300'

8/17

98

[Murphy/sublet PCPP]

Malaysia

1y opt.

1Y unpriced option

4. Under Management

# Name

Year

Built

Water Depth Max

K feet

Contract

End

Day rate Location
1 Thunder Horse DeepWater semi-sub 1/22

95+10

Total: 105

[BP]

GOM

2 Mad Dog DeepWater Spar Drilling Rig

1/17

1/17-1/22

62+10

55

[BP]

GOM

Rigs: Classified as Cold stacked, Ready stacked or available.

# Rig name Year Built Status End contract Location
Floaters
1

EnscoDS-3

2010 Preservation stacking prepa. Spain
2

EnscoDS-4

2010 Preservation Stacked Spain
3 Ensco DS-5 2011 Preservation Stacked Dispute with Petrobras and Shipyard. Spain
4 Ensco DS-7 2013 Available See note below Spain
5 Ensco DS-9 2015 Available Singapore
6 Ensco 5005 1982/1997 Preservation stacked Singapore
7 Ensco 8500 2008 Preservation stacked US GoM
8 Ensco 8501 2008 Preservation stacked US GoM
9 Ensco 8502 2010 Preservation stacked US GoM
10 Ensco 8503 2010 Available US GoM
11 Ensco 8504 2011 Available Singapore
12 Ensco 8506 2012 Preservation stacking preparation US GoM
Jackups
1 Ensco 81 1979/2003 Cold Stacked US GoM
2 Ensco 82 1979/2003 Cold Stacked US GoM
3 Ensco 86 1981/2006 Cold Stacked US GoM
4 Ensco 99 1985/2005 Cold Stacked US GoM
5 Ensco 70 1981/1996 Cold Stacked UK
6 Ensco 102 2002 Available UK
7 Ensco 56 1982/2006 Cold Stacked Malaysia
8 Ensco 105 2002/2010 Cold Stacked Singapore
9 Ensco 106 2005 Available Malaysia
10 Ensco 84 1981/2013 Ready stacked 11/15 Bahrain
11 Ensco 140 2016 available - Warm stacked paid by shipyard up to 2-y UAE
12 Ensco 141 2016 available - Warm stacked paid by shipyard up to 2-y UAE
13 Ensco 120 2013 Available UK
14 Ensco 110 2015 Available UAE

Notice DS-7: Notice of early termination for convenience received from the customer with an effective date of early Nov.16. For the first 90 days following the effective date, the daily termination fee is equal to the operating day rate of approx. $585,000. For the remaining term through Nov. 17, the daily termination fee is equal to approx. $439,000. If the rig is contracted to a third party, the day rate revenue received is deducted from the approx. $439,000 due from the original customer through Nov. 17. Plus approx. $90,000 per day amortized Aug. 16 to Oct. 16 for mobilization and capital upgrades

Rigs: Held for Sale/Discontinued operations.

Ensco 7500 Cold stacked Spain
Ensco 53 SOLD UAE
Ensco 90 Cold stacked GOM
Ensco 94 Cold Stacked Bahrain

Fleet Analysis as of December 6, 2016:

Total Drillships Semi-subs Jackups Under management
Under-construction 2 1 0 1 -
Total working rigs 36 3 5 26 2
Cold-stacked/Warm-stacked/Available 27

5

8 14 -
Held for sale 3 0 1 2 -
Total 68 8 13 45 2

Commentary:

It was a really busy FSR again, and I am going to list all the changes that I noticed:

  1. Ensco DS-3 is prepared stacking in Spain
  2. Ensco 8503 is now available
  3. Ensco 8504 is now available
  4. Ensco 68 got a two small contracts in GoM with Fieldwood/Enver for about 2-month work total. @$62k/d
  5. Ensco 75 got a small extension with Apache/Rooster in GoM. @$45k/d
  6. Ensco 87 got a small extension with Talos in GoM. @$42k/d
  7. Ensco 120 is now available
  8. Ensco 102 is now available
  9. Ensco 72 Got an extension with ENGIE to late 9/17
  10. Ensco 121 Extended to late December 16
  11. Ensco 122 Extended to 2/17 by NAM in Nz and then awarded a contract with Ithaca from 3/17 to Late 8/17 @$115K/d
  12. Ensco 141 has been delivered and is warm stacked paid by Lamprell shipyard (up to 2-year). Same deal as Ensco 140 its sister warm stacked at the same location.
  13. Ensco 110 is now available.
  14. Ensco has 6 JUs working for Saudi Aramco. the Ensco 54,76,96,97 day rate for 2017 are being discussed and may get lower than indicated above.
  15. Ensco 104 Apparently the contract from 1/18 to 9/18 @$95k/d with NDC has been terminated?
  16. Ensco 52 the rig has been sub-contracted by Murphy to PCPP @$98k/d.
  17. Ensco 53 has been sold
  18. Ensco 94 is now available for sale. Cold stacked in Bahrain.

Overall, many changes as usual, but not much increase in contract backlog. The contract backlog estimated as of today is now $3.6 billion, remains constant from the previous October FSR (3.7 billion).

I noticed some new contracting in the North Sea with the French ENGIE in the Netherlands, and small contracts in shallow water in the Gulf of Mexico, but there is nothing very exciting yet. The company has not shown the first signs of a recovery yet, despite the burst of optimism that has followed the recent decision to cut production by OPEC. It will take a while before this decision -- if it is followed by facts which remains to be seen -- translates to any increase in tendering activity awaited anxiously by the offshore drilling industry.

Apparently, the contract with NDC which was supposed to roll off September 2018 -- after the completion of two-wells for Wintershall until 1/18 -- has been deleted without explanation? Thus, I concluded that NDC terminated the contract by about 6-month. We need more information about this situation. We do not know if Ensco will get some termination fee?

Finally, Ensco has 6 Jacks-ups working for Saudi Aramco and has indicated that the day rate for 2017 (four of the six Jack-ups) is being negotiated, which means probably a lower rate than indicated now.

This article will be followed with another about Ensco equity offering indicated yesterday as well.

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Disclosure: I am/we are long ESV.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I trade the stock as well.