Erin Energy (ERN -8.9%) says it is set to start drilling at the Oyo-9 well offshore Nigeria by the end of July, which it expects will double the company's production.
ERN says Oyo-9 is expected to increase field production by 6K-7K bbl/day of oil; coinciding with the completion of Oyo-9, ERN says it also will tie back in to its FPSO the Oyo-7 well which could add an additional 2K bbl/day.
ERN says rig contractor Pacific Drilling (PACD -1.3%) will be ready to mobilize the Pacific Bora drillship for use in the project.
Ensco (ESV -4%) slumps to 52-week lows following its acquisition of smaller offshore drilling rival Atwood Oceanics (ATW +25.9%) in an all-stock deal valued at ~$839M, but Clarksons Platou analysts upgrade ESV as well as Rowan (RDC +2.3%) to Buy from Neutral, preferring jack-up exposure along with a positive view on shallow water demand.
Clarksons also says the recent selloff is overdone for jack-up levered names, and that negative oil sentiment presents "vulnerability to [a] short squeeze."
Also, RBC analyst Kurt Hallead thinks ESV's takeout of ATW could spark more M&A action among offshore drillers, with possible future combinations involving Transocean (RIG -2.4%), Diamond Offshore Drilling (DO -3.6%) and Noble Corp. (NE +2.1%) as well-capitalized potential buyers, and Ocean Rig UDW (ORIG -2.2%), Pacific Drilling (PACD -0.5%) and RDC as potential targets.
After turning down a proposal that would leave shareholders with a 33% stake in a reorganized company, creditors propose converting all PACD debt into a 98% equity stake but also providing existing shareholders with warrants that could give them another 20% of the company.