Pride International (IL/A): Contract announcements suggest significant upside to consensus - Goldman Sachs - October 26, 2005
PDE after the close announced 3 bullish Gulf jackup contracts, all of which established new high water dayrates:
(1) PDE Alaska, a 250'MC jackup, was contracted at $90k per day beginning in November;
(2) 200'MC PDE Florida at $85k; and
(3) 250'MS PDE Michigan at $80k.
The prior highs for all three types of rigs - which was the modeling assumption in our EPS est - was in the mid-$60k range. We are not adjusting estimates at this time, pending PDE's earnings release, however, on a preliminary basis we see 20+% upside to consensus 2006E EPS, to the $2.10+ range. The PDE contracts are also bullish for Todco (IL/A), which has 18 commodity jackups in the US Gulf, and +$0.37 EPS leverage for every $5k dayrate increase. Our 25% above- consensus 2006 EPS of $3.96 for THE assumes an avg Gulf jackup rate of $79k in 2006. PDE's earnings release is Nov 8. Maintain IL/A and $33 fair value.
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Jason Gilbert; Terry Darling. |
