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Benjamin · 31-05-2009, 12:24

Is It Safe? Idle Rigs Could Hurt Transocean
Richard Widows
05/28/09

"Is It Safe?" is a daily feature by TheStreet.com Ratings that looks at a company's risk and reward potential. Find out if your stocks are safe each morning at 4.
Transocean's(RIG Quote) cheap shares and dominance in offshore oil drilling make it seem like a sure bet. But its investors might have to wait at least a year for any significant gains.

The Switzerland-based company is the world's biggest offshore driller with 136 rigs, including 34 that can run in water deeper than 4,500 feet. With demand for petroleum picking up and the price of crude oil edging higher, that seems like a favorable position.

However, Transocean rigs might sit idle as oil and gas producers cut capital spending this year. Overcapacity could stifle earnings at least though next year and potentially through 2011, according to at least one analyst. That means Transocean will collect less lease fees from customers that use its equipment, making profits elusive.

Judson E. Bailey, a managing director at Jefferies & Co.(JEF Quote), expects the firm's net income to decline through 2011. He says the deepwater drilling industry might be "modestly oversupplied by late 2010 to 2011, thus facilitating a sharper and more prolonged dayrate and earnings downturn." He downgraded the company to "hold" from "buy" in a recent report.

Transocean, which controls 38% of the deepwater drilling market, has a history of wide stock-price swings. After falling below $20 in 2003, the stock climbed to $160 last year. When crude prices collapsed to less than $40 after approaching $150 last July, the company's shares imploded. They've since recovered, rising 61% this year as the Morgan Stanley Oil Service Index climbed 43%.

Analysts expect Transocean's profit to change only slightly during the next two years compared with 2008, when it earned $13.09 a share. The shares have been trading at 5.8 times this year's projected earnings, less than half the industry's average price-to-earnings ratio of 12.

Even though the shares seem like a good buy, Bailey says Transocean investors "should think about taking profits at current levels and eventually redeploying funds" in drillers such as
Ensco International (ESV),
Noble (NE) ,
Pride International (PDE) and
Rowan Cos. (RDC) .

Bailey expects profits of some of the competitors to trough next year.

TheStreet.com Ratings grades Transocean a C-plus, a "hold" recommendation. Even though Transocean is the industry's leader, its competitors offer more growth potential.

07.05.2009
Transocean quarterly profit tops Wall St, stock up
By Braden Reddall

SAN FRANCISCO, May 6 (Reuters) - Transocean Ltd reported a lower quarterly profit as the largest offshore rig contractor was hit by a slowdown caused by weak energy prices, but its shares rose as earnings topped estimates and oil prices hit a 2009 high.

Chief Executive Bob Long said the company is well positioned with nearly $36 billion of contracts in hand and a firm stake in the still-healthy deepwater market, though he forecast more weakness for shallow-water rigs.

'It would be very difficult to build a compelling case for recovery in jackups as early as 2010,' Long told analysts on a conference call. 'There is just too much new capacity coming on without contract.'

The company, with a fleet of 136 offshore units and 10 newbuild ultra-deepwater rigs, announced late on Tuesday it was taking three jackups in Africa out of service.

First-quarter net profit fell to $942 million, or $2.93 per share, from $1.15 billion, or $3.58 per share, a year before. Revenue rose less than 1 percent to $3.12 billion.

Before items, Transocean earned $3.75 per share, compared with the Reuters Estimates average of $3.50 expected by analysts, joining a growing list of energy companies to outperform diminished expectations.

Macquarie Securities analyst Angie Sedita, who rates Transocean shares as 'outperform,' welcomed its focus on cost control, with total expenses 7 percent below her forecast.

The entire sector got a boost on Wednesday from a rally in crude oil prices to 2009 highs as U.S. crude inventories did not rise as much as expected.

Shares of Transocean rose 2.2 percent to $75.54, touching a six-month high of $77.40 earlier. The stock is up 58 percent in 2009, comfortably outperforming a 38 percent increase in the Philadelphia Stock Exchange oil service index.

Transocean's nearest competitor, Diamond Offshore Drilling Inc , also topped Wall Street's first-quarter estimates thanks to strength in deepwater drilling.

Among others, Noble Corp and Nabors Industries Ltd also managed better-than-expected first quarters despite the tough macroeconomic environment.

Smaller rival Atwood Oceanics Inc reported later on Wednesday a profit for its second quarter ended March of $56.4 million, or 88 cents per share, above the 79 cents expected by analysts and 65 cents a year before. Revenue grew 24 percent to $141 million.

ENSCO International Inc., WKN: 891183, $, www.enscous.com keine Zertis oder OS
global offshore oil and gas drilling contractor, worldwide exploration and development efforts, fleet of 52 rigs (including six ultra-deepwater rigs under construction) is strategically located in the most prolific domestic and international oil and gas markets and is managed through four major business units including: Deepwater, Asia Pacific, Europe / Africa, and North & South America.

MIDNIGHT OIL EXPLO COM, WKN: B068S36, CAD
junior exploration and production company that focuses on selected multi-zone, high-potential areas of the Western Canadian Sedimentary Basin. Number of Employees: 29 !!!

31-05-2009, 12:24	#3
Benjamin TBB Family Registriert seit: Mar 2004 Beiträge: 10.374	Is It Safe? Idle Rigs Could Hurt Transocean Richard Widows 05/28/09 "Is It Safe?" is a daily feature by TheStreet.com Ratings that looks at a company's risk and reward potential. Find out if your stocks are safe each morning at 4. Transocean's(RIG Quote) cheap shares and dominance in offshore oil drilling make it seem like a sure bet. But its investors might have to wait at least a year for any significant gains. The Switzerland-based company is the world's biggest offshore driller with 136 rigs, including 34 that can run in water deeper than 4,500 feet. With demand for petroleum picking up and the price of crude oil edging higher, that seems like a favorable position. However, Transocean rigs might sit idle as oil and gas producers cut capital spending this year. Overcapacity could stifle earnings at least though next year and potentially through 2011, according to at least one analyst. That means Transocean will collect less lease fees from customers that use its equipment, making profits elusive. Judson E. Bailey, a managing director at Jefferies & Co.(JEF Quote), expects the firm's net income to decline through 2011. He says the deepwater drilling industry might be "modestly oversupplied by late 2010 to 2011, thus facilitating a sharper and more prolonged dayrate and earnings downturn." He downgraded the company to "hold" from "buy" in a recent report. Transocean, which controls 38% of the deepwater drilling market, has a history of wide stock-price swings. After falling below $20 in 2003, the stock climbed to $160 last year. When crude prices collapsed to less than $40 after approaching $150 last July, the company's shares imploded. They've since recovered, rising 61% this year as the Morgan Stanley Oil Service Index climbed 43%. Analysts expect Transocean's profit to change only slightly during the next two years compared with 2008, when it earned $13.09 a share. The shares have been trading at 5.8 times this year's projected earnings, less than half the industry's average price-to-earnings ratio of 12. Even though the shares seem like a good buy, Bailey says Transocean investors "should think about taking profits at current levels and eventually redeploying funds" in drillers such as Ensco International (ESV), Noble (NE) , Pride International (PDE) and Rowan Cos. (RDC) . Bailey expects profits of some of the competitors to trough next year. TheStreet.com Ratings grades Transocean a C-plus, a "hold" recommendation. Even though Transocean is the industry's leader, its competitors offer more growth potential. 07.05.2009 Transocean quarterly profit tops Wall St, stock up By Braden Reddall SAN FRANCISCO, May 6 (Reuters) - Transocean Ltd reported a lower quarterly profit as the largest offshore rig contractor was hit by a slowdown caused by weak energy prices, but its shares rose as earnings topped estimates and oil prices hit a 2009 high. Chief Executive Bob Long said the company is well positioned with nearly $36 billion of contracts in hand and a firm stake in the still-healthy deepwater market, though he forecast more weakness for shallow-water rigs. 'It would be very difficult to build a compelling case for recovery in jackups as early as 2010,' Long told analysts on a conference call. 'There is just too much new capacity coming on without contract.' The company, with a fleet of 136 offshore units and 10 newbuild ultra-deepwater rigs, announced late on Tuesday it was taking three jackups in Africa out of service. First-quarter net profit fell to $942 million, or $2.93 per share, from $1.15 billion, or $3.58 per share, a year before. Revenue rose less than 1 percent to $3.12 billion. Before items, Transocean earned $3.75 per share, compared with the Reuters Estimates average of $3.50 expected by analysts, joining a growing list of energy companies to outperform diminished expectations. Macquarie Securities analyst Angie Sedita, who rates Transocean shares as 'outperform,' welcomed its focus on cost control, with total expenses 7 percent below her forecast. The entire sector got a boost on Wednesday from a rally in crude oil prices to 2009 highs as U.S. crude inventories did not rise as much as expected. Shares of Transocean rose 2.2 percent to $75.54, touching a six-month high of $77.40 earlier. The stock is up 58 percent in 2009, comfortably outperforming a 38 percent increase in the Philadelphia Stock Exchange oil service index. Transocean's nearest competitor, Diamond Offshore Drilling Inc , also topped Wall Street's first-quarter estimates thanks to strength in deepwater drilling. Among others, Noble Corp and Nabors Industries Ltd also managed better-than-expected first quarters despite the tough macroeconomic environment. Smaller rival Atwood Oceanics Inc reported later on Wednesday a profit for its second quarter ended March of $56.4 million, or 88 cents per share, above the 79 cents expected by analysts and 65 cents a year before. Revenue grew 24 percent to $141 million. ENSCO International Inc., WKN: 891183, $, www.enscous.com keine Zertis oder OS global offshore oil and gas drilling contractor, worldwide exploration and development efforts, fleet of 52 rigs (including six ultra-deepwater rigs under construction) is strategically located in the most prolific domestic and international oil and gas markets and is managed through four major business units including: Deepwater, Asia Pacific, Europe / Africa, and North & South America. MIDNIGHT OIL EXPLO COM, WKN: B068S36, CAD junior exploration and production company that focuses on selected multi-zone, high-potential areas of the Western Canadian Sedimentary Basin. Number of Employees: 29 !!! Geändert von Benjamin (31-05-2009 um 14:27 Uhr)