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November Fleet Report

|Includes: Atwood Oceanics Inc. (ATW), DO, NADL, NE, ORIG, RDC, RIG, RIGP, SDLPF, SDRL, VALQ, VTGDF

Hello Fellow Investors! November was a busy month for the offshore drillers. Many companies released earnings, so we'll dig into those. Also, many new fleet status reports were released, many showing how tough it is in the industry right now, but also many showing the work is still there.

Below is a list of the companies that are covered:

Atwood Oceanics (NYSE:ATW)

Noble Corp (NYSE:NE)

Seadrill (NYSE:SDRL)

Diamond Offshore (NYSE:DO)

Ocean Rig (NASDAQ:ORIG)

Seadrill Partners (NYSE:SDLP)

Ensco PLC (NYSE:ESV)

Pacific Drilling (NYSE:PACD)

Transocean (NYSE:RIG)

Hercules Offshore (NASDAQ:HERO)

Paragon Offshore (NYSE:PGN)

Transocean Partners (NYSE:RIGP)

North Atlantic Drilling (NYSE:NADL)

Rowan Companies (NYSE:RDC)

Vantage Offshore (OTCPK:VTGDF)

November Stock Performance

November Performance

 

Company

Month (%) Change

Atwood Oceanics (NYSE:ATW)

-9.36

Diamond Offshore (NYSE:DO)

2.4

Ensco PLC (ESV)

-4.68

Hercules Offshore (OTCPK:HEROQ)

-60.84

Noble Corp (NYSE:NE)

-6.42

North Atlantic Drilling (NYSE:NADL)

-36.9

ORIG

-8.8

Pacific Drilling (NYSE:PACD)

-23.84

Paragon Offshore (PGN)

-2.38

Rowan Companies (NYSE:RDC)

-0.64

Seadrill (NYSE:SDRL)

-9.52

Seadrill Partners (SDLP)

-25.59

Transocean (NYSE:RIG)

-14.01

Transocean Partners (NYSE:RIGP)

-8.06

Vantage Offshore (OTCPK:VTGDF)

-42.58

Average

-16.75

Company Updates

Atwood Oceanics

Atwood released 2015 fiscal fourth quarter and year end results on November 9th. For the fourth quarter, Atwood announced $363.2 million in revenue and $2.32 earnings per share. Full year revenue and earnings came in at $1.4 billion and $6.65 per share, respectively.

Atwood also released an updated fleet status report on November 2nd, with a couple of changes (that weren't in my October Fleet Report):

  1. The Atwood Eagle's day rate decreased $10,000 to $440,000.
  2. The Atwood Mako is ready stacked.
  3. The Atwood Manta is ready stacked.
  4. Announced November 10th (after FSR released), the Atwood Advantage received a four-month (120-day) extension. The contract will now end in August of 2017. For that four-months, the rig will work for a day rate of $240,000 (a 59% decline).
  5. We also learned on November 10th that one of Atwood's drillships (either the Atwood Admiral or the Atwood Archer will have a contract starting in the third quarter of 2017.

On November 19th, Atwood announced that they were cutting their quarterly dividend from $0.25 to $0.075- a 70% decline.

The next rig to roll off contract will be the Atwood Falcon in March of 2016.

Diamond Offshore

Diamond Offshore released 2015 third quarter results on November 2nd. Revenue and earnings were $610 million and $0.99 per share, respectively.

An updated fleet status report was released on November 2nd, with a few changes:

  1. The Ocean Guardian received a one-year contract starting in March of 2016 at a day rate of $220,000. (I assume) the rig will be ready stacked until the contract starts next year.
  2. The Ocean America is now ready stacked.
  3. The Ocean Courage received an 875-day extension, starting in late February of 2018 until late July of 2020, at a day rate of $380,000 (a decrease of 16% from the current day rate of $455,000).
  4. The Ocean Summit is now cold stacked.
  5. The Ocean Alliance, which had a contract until June of 2016, is now cold stacked.
  6. The Ocean Clipper, which was contracted through December of 2015, has been retired.

The Ocean Alliance and the Ocean Clipper had their contracts end October 30th in exchange for the 875-day extension for the Ocean Courage.

The next rig to roll off contract is the Ocean Onyx, which I assume is now ready stacked. The Ocean Valiant and the Ocean Endeavor will be ending their contracts in December.

Ensco PLC

Compared to last month, November was a REALLY slow month for Ensco. The most recent fleet status report was from October and earnings were released in October as well. As far as we know, there were no significant changes to Ensco's fleet.

The Ensco 84 has rolled off contract and is now ready stacked. The next rigs to roll off contracts next are the Ensco 8506, Ensco 53, and the Ensco 107 in February of 2016.

Hercules Offshore

On November 6th, Hercules emerged from bankruptcy.

On November 24th, an updated fleet status report was released, with quite a few changes:

  1. The Hercules 173 is now ready stacked.
  2. The Hercules 205 (originally rolling off contract in December) received an extension until March of 2016 at the same day rate. $50,000.
  3. The Hercules 264 will end its contract with Linder on December 3rd (originally November 18th). It will be ready stacked until January 31st, 2016, where it will then start a 20 day contract with Byron Energy at $50,000 a day.
  4. The Hercules 300 (originally contracted through December 31st) secured an extension through June 22nd. The new day rate, effective November 15th, is $55,000 (a 19% decline).
  5. The Hercules 350 is now ready stacked.

North Atlantic Drilling

North Atlantic released 2015 third quarter earnings on November 24th. Revenue and Earnings were $194.6 million and (0.01) per share, respectively.

An updated fleet status report was released, and there were only insignificant changes- just minor day rate changes.

The next rig to roll off contract is the West Alpha in July of 2016.

Noble Corp

November was also a slow month for Noble. An updated fleet status report was released, but with only insignificant changes.

The Atmos Runner and the Regina Allen came off contract this month, and the next rig to end its contract is the Clyde Boudreaux.

Ocean Rig

Ocean Rig has yet to release earnings and an updated fleet status report (which is usually done at the beginning of November).

As far as we know, no changes have been made.

The next rig to roll off contract is the Eirik Raude in January of 2016.

Pacific Drilling

Pacific Drilling released 2015 third quarter results on November 2nd. Revenue and earnings were $260.2 million and $0.19 per share, respectively. Their last fleet status report was released on October 29th, and there has been no public updates since.

The next rig to end work is the Pacific Khamsin in January of 2016.

Paragon Offshore

Paragon released 2015 third quarter results on November 9th. Revenue and earnings came in at $369 million and (12.46) per share, respectively. The reason for such a massive loss was because of a $1.15 billion (non-cash) impairment charge. Adjusted net income was ($0.00) for the quarter.

An updated fleet status report was released on November 9th, with a few changes:

  1. The Noble Ed Holt started a contract in late October, originally with a day rate of $62,000. Because Paragon was late to deliver the rig, the new day rate is $38,000.
  2. The M824 is now cold stacked.
  3. The M841 is now cold stacked.

The MSS1 and the M826 are the next rigs to roll off contract, in December.

Rowan Companies

Rowan released 2015 third quarter results on November 3rd. Revenue and earnings were $545.4 million and (1.92) per share. The reason for the net loss was because of a (non-cash) impairment charge of $273.8 million. Adjusted net income was $0.89 per share.

No new news has been released regarding any changes to Rowan's fleet, so I assume nothing has changed.

The next rigs to roll off contract are the Gilbert Rowe and the Rowan EXL IV in December.

Seadrill

Seadrill released earnings on November 24th. Revenue and earnings were reported at $985 million and ($3.70) per share, respectively. Without the (non-cash) impairment charge of $1.8 billion, net income would have been $0.21 per share.

Seadrill also released an updated fleet status report on November 24th. There were many minor day rate changes on many of the rigs. There were only two "important" changes to the overall fleet:

  1. The West Telesto secured a three month extension, at the same day rate of $265,000.
  2. The West Callisto received an extension through March of 2016, followed by another extension starting in April of 2016, lasting until November of 2018. In April of 2016, the day rate will drop to $123,000 from $135,000 (a 9% decline).

The next rig to end its contract is the West Cressida in April of 2016.

Seadrill Partners

Seadrill Partners also released 2015 third quarter results on November 24th, with revenue of $456.5 million and DCF (discounted cash flow) of $0.874 per share. An updated fleet status report was released, and there wasn't a single change on it (which made it easy for me!).

The next rigs to roll off contract are the West Aquarius and the West Capella in April of 2017.

Transocean

Transocean released 2015 third quarter results on November 4th. Revenues were $1.61 billion and earnings were $0.87 per share. Since the fleet status report on October 26th, no new contracts or extensions have been publicly released.

The Cajun Express, Deepwater Navigator, and the Sedco 711 are the next rigs to end contracts, in December.

Transocean Partners

Transocean Partners also released 2015 third quarter results on November 4th. Revenues were $125 million and earnings were (1.94) per share. The loss was due to a (non-cash) impairment charge of $134 million. Adjusted net income was $0.19 per unit. Since October's fleet status report, no new news has been released.

The next rig to end its contract is the Development Driller III, in November of 2016.

Vantage Drilling

Vantage released 2015 third quarter results on November 9th. Revenue was $208.5 million and earnings were ($0.17) per share. It was surprising to see that Vantage did not have a conference call to discuss results. No updated fleet status report has been released since August 13th. I'm assuming nothing has changed since then (except for the Titanium Explorer contract cancellation).

The Sapphire Driller ended its contract in November and is now ready stacked. The next rig to end its contract is the Platinum Explorer.

Disclosure: I am/we are long RIGP.