Ensco: Another Impressive Fleet Status - A Detailed Analysis

Summary

• Ensco fleet status as of July 20, 2017.
• The fleet status today was really impressive, especially for the Jack-up segment. Backlog is $3.3 billion as of today.
• ESV is a very volatile stock, and should be considered a good trading tool only, due to the uncertainty surrounding the oil prices at the moment, and the potential merger with Atwood.

Image: Jack-up Ensco 120

Ensco PLC (ESV)

Investment Thesis:

Ensco is one of my long-term offshore drillers, and I am confident the company will survive these tough headwinds. A simple look at the fleet status is very telling.

Recently Ensco announced that it wants to acquire Atwood Oceanics (ATW) and I am not totally convinced that the company paid the right price for ATW, especially if oil prices are not recovering fast to the $55 per barrel level. Please read my preceding article here.

ESV is a very volatile stock, and should be considered a good trading tool only, due to the uncertainty surrounding the oil prices at the moment, and the potential merger with Atwood.

I recommend ESV as a hold for the long-term. Yet, a cautious accumulation on any weakness at $5.20 or below for investors who own already an ESV holding, is a possible strategy.

Technically, ESV is showing a descending channel pattern with a potential re-test of the $5 after the stock failed to successfully break out the resistance line yesterday at around $5.80.

A descending channel or downtrend is the price action contained between two downward sloping parallel lines. It is short-term bearish trend as we can see in the chart below.

Fleet analysis:

Ensco fleet status as of July 20, 2017, [click here.]

1. Drillships

#	Name Year Built	Water Depth Max K feet	Contract End	Day rate K $	Location	Info 0-rate
1	Ensco DS-4 2010	10/12	8/17 - 8/19	200~	[Chevron] Nigeria	1y option
2	Ensco DS-6 2011	10/12	2/18	485 +102 amort. Total: 587	[BP] Egypt	2x1Y option
3	Ensco DS-7 2013	10/12	8/17 8/17 - 10/17	Contract prepa. ~200k	[Total] Ivory Coast	1y option
4	Ensco DS-8 2014	10/12	11/20	From 618 +14 amort. Total: 632	[Total] Angola	1 Y option
5	Ensco DS-10 2015	10/12	under constr.	3Q'17 3/18 - 3/19 Total: 200~	South Korea [Shell]	6 x 1y options

Click to enlarge

2. Semi-Submersibles

#	Name Year Built Upg.	Water Depth Max K feet	Contract End	Day rate K $	Location	Info. 0-rate
1	Ensco 8503 2010	8.5/10	8/17 - 10/17	Not disclosed (~95k?)	[Talos/WTI] US GoM
2	Ensco 8505 2012	8.5/10	7/17	Not disclosed (~130k?)	[Apache] U.S. GOM
3	Ensco 6001 2000	5.7	6/18	284 +20 amort. Total: 304	[Petrobras] Brazil
4	Ensco 6002 2001	5.7	12/19	248 + 17 amort. Total: 265	[Petrobras] Brazil	Bonus 15% possible
5	Ensco 5004 1982	1.5	9/17 9/17 - 7/18	60 + 9 195 + 9 Total: 204	[Mellitha] Mediterranee
6	Ensco 5006 1998/1999	7.5	8/19	362 + 125 Total: 487	[Inpex] Australia

Click to enlarge

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'	9/17 9/17 - 1/18	100 100	[NAM/Ithaca] UK - NZ	+ Various options
3	Ensco 121 2013	Ultra-Premium Harsh Environment Water Depth Max: 400'	2/18	95~	[INEOS] UK	+5 x 1 well option
4	Ensco 120 2013	Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'	7/20	110~	[ConocoPhillips] U.K.	+ 2 x 1 Y opt.
5	Ensco 110 2015	Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'	8/17 8/17 - 8/20	Contract preps. 75~	[North Oil Co.] Qatar	1Y priced opt.
6	Ensco 109 2008	Special Capabilities: High Specification, HPHT Capable Water Depth Max: 400'	1/18	172 +13 for mob.	[Chevron] Angola
7	Ensco 107 2006	High Specification, HPHT Capable Water Depth Max: 400'	8/17	129	[Chevron] Australia
8	Ensco 106 2005	High Specification, HPHT Capable Water Depth Max: 400'	9/17 12/17-12/22	80? 90?	[Sapura En./ BP] Malaysia/Indonesia +13x1well opt.
9	Ensco 102 2002	High Specification, HPHT Capable Water Depth Max: 400'	11/17 - 12/18	90~	[Arena] Gulf of Mexico	+ 90-d option
10	Ensco 101 2000	Heavy Duty, HPHT Capable Water Depth Max: 400'	Late 8/17	75	[ENGIE] NZ	+ Various priced options
11	Ensco 100 1987 2009	Heavy Duty, HPHT Capable Water Depth Max: 400'	8/18	185	[Premier oil] U.K.
12	Ensco 97 1980	Water Depth Max: 250'	2/19	65	[Aramco] Saudi Arabia	(21d) 2Q'17
13	Ensco 96 1982 2011	Water Depth Max: 250'	2/19	65	[Aramco] Saudi Arabia	(60d) 3Q'17
14	Ensco 92 1982 1996	Water Depth Max: 225'	12/22	95	[Conoco Phillips] UK	(23d) 3Q'17
15	Ensco 88 1982 2004	Water Depth Max: 250'	11/19	65	[Aramco] Saudi Arabia	1Y priced option
16	Ensco 87 1982 2006	Water Depth Max: 250'	8/17	42?	[Renaissance] GoM
17	Ensco 84	Water Depth Max: 250'	8/21	72	[Aramco] Saudi Arabia
18	Ensco 80 1978 2011	Water Depth Max: 225'	12/18	72	[Repsol/Sinopec] U.K.
19	Ensco 76 2000	Special Capabilities: HPHT Capable Water Depth Max: 350'	12/18	127	[Aramco] Saudi Arabia
20	Ensco 75 1999	Special Capabilities: HPHT Capable Water Depth Max: 350'	7/17 8/17 - 9/17	45 45	[Walter Oil] US GoM
21	Ensco 72 1981 2012	Water Depth Max: 225'	10/17	65	[ENGIE] NZ	+opt.
22	Ensco 71 1982	Water Depth Max: 225'	8/17 (7/18) Early termination for convenience	95	[Maersk] Denmark
23	Ensco 68	Water Depth Max: 400'	7/17 7/17 - 8/17	60~ 55~	[WT offshore/Enven] US GoM
24	Ensco 67 1976 2005	Water Depth Max: 400'	12/17	50	[Pertamina] Indonesia +1Y opt.	(37d) 3Q17 maintenance
25	Ensco 54	Water Depth Max: 300'	9/22	72 + 5	[Aramco] Saudi Arabia	1Y priced option (80d) 1Q'18

Click to enlarge

4. Under Management

#	Name	Year Built	Water Depth Max K feet	Contract End	Day rate	Location
1	Thunder Horse		Deep Water semi-sub	1/22	95+10 Total: 105	[BP] GOM +5x 1y opt.
2	Mad Dog		Deep Water Spar Drilling Rig	1/22	55	[BP] GOM +5x 1y opt.

Click to enlarge

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

#	Rig name	Year Built	Status	End contract	Location
Floaters
1	Ensco DS-3	2010	Preservation stacked		Spain
2	Ensco DS-5	2011	Preservation Stacked	Dispute with Petrobras and Shipyard.	Spain
3	Ensco DS-9	2015	Available		Singapore
4	Ensco 5005	1982/1997	Preservation stacked		Singapore
5	Ensco 8500	2008	Preservation stacked		US GoM
6	Ensco 8501	2008	Preservation stacked		US GoM
7	Ensco 8502	2010	Preservation stacked		US GoM
8	Ensco 8504	2011	Available		Singapore
9	Ensco 8506	2012	Preservation stacked		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	SOLD	US GoM
4	Ensco 99	1985/2005	Cold Stacked	SOLD	US GoM
5	Ensco 70	1981/1996	Cold Stacked		UK
6	Ensco 105	2002/2010	Cold Stacked		Singapore
7	Ensco 140	2016	Available - Warm stacked paid by shipyard up to 2-y		UAE
8	Ensco 141	2016	Available - Warm stacked paid by shipyard up to 2-y		UAE
9	Ensco 108	2007	Available		Singapore
10	Ensco 104	2002 2011	Available		UAE

Click to enlarge

Rigs: Held for Sale/Discontinued operations.

Ensco 7500	Cold stacked	Spain
Ensco 90	SOLD	GOM
Ensco 52	Cold Stacked	Singapore

Click to enlarge

Fleet Analysis as of July 20, 2017:

	Total	Drillships	Semi-subs	Jackups	Under management
Under-construction	2	1	0	1	-
Total working rigs	36	4	6	24	2
Cold-stacked/Warm-stacked/Available	19	3	6	10	-
Held for sale	2	0	1	1	-
Total	59	8	13	36	2

Click to enlarge

Graphs, Analysis:

Commentary:

Ensco released its fleet status today and it was really impressive, especially for the Jack-up segment. According to OffshoreEnergyToday:

1 - Jack-up.

Ensco said in the report that the 2013-built jack-up Ensco 120 had secured a three-year contract with ConocoPhillips in the UK sector of the North Sea that started in July. The contract is firm until July 2020 and it includes two one-year options.

Another North Sea gig has been secured by the 2014-built jack-up Ensco 122, which will start next September and end on January 2018. The contract also includes various options through December 2020. The rig is currently under contract with Ithaca in the UK, but come September and the rig will go work in the Dutch sector of the North Sea for NAM.

Also in the Dutch North Sea, the contract for the 1981-built Ensco 72 has been extended by one well until October 2017. The rig is working for Engie.

Over in the U.S. Gulf of Mexico, the 2002-built jack-up rig Ensco 102 has been awarded a 400-day contract with Arena that is expected to start in November 2017 until December 2018. The contract also includes one 90-day option.

Further, in the Gulf of Mexico, the 1982-built Ensco 87 has been awarded a one-well contract with Renaissance that started in July 2017 and ends in August.

Down in Australia, the 2006-built Ensco 107 has won a one-month contract extension which ends in August. The day rate is approx. $129,000. The rig has been with Chevron since October last year.

Finally, the jack-up rig Ensco 110, built in 2015, has secured a three-year contract with North Oil Company offshore Qatar that is expected to start next month. The contract also includes one 1-year priced option.

2 - Floaters.

The 2010-built Ensco 8503 drilling rig has won a one-well contract with Talos Energy in the U.S. Gulf of Mexico following completion of its current operations in Mexico. The rig's contract now expires in October 2017.

The 2012-built Ensco 8505 rig has been awarded a one-well contract with Apache in the U.S. Gulf of Mexico that started in July 2017. The one-well contract is set to end this month.

Also, I commented on the recent Company's three drillship contracts on July 12, 2017. Please click here (Drillships DS-4, DS-7 and DS-10).

Important note: Do not forget to follow me on ESV and other offshore drillers. Thank you for your support.

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.