Oilfield Services
Credit Suisse Comment
Things We've Learned This Week - 21 March 2013
RIG is getting its ducks in a row ahead of its annual shareholder meeting.
RIG plans to initiate a $2.24 dividend (not the $4.00 dividend requested by
Ichan) citing a balanced mix of dividend and CAPEX. While a higher
dividend would be nice - we agree with management’s decision to focus on
both a dividend and a fleet renewal (a lot of old gen rigs in the fleet). But
investors can be short-term oriented and a 7.5% yield is attractive. Should
be an interesting meeting if a meeting of the minds is not reached
beforehand.
RDC: The backlog continues to grow, now at $3.6bn or 87% of market
cap. Higher standards post-Macondo, interest in the deep shelf, long
horizontals are all driving continued bifurcation in rig class. Remember,
RDC has 4 drillships under construction for delivery in ‘13, ‘14 and ‘15. Our
top rig idea.
ATW has 5 drillships and 4 high-spec jackups being delivered over the next
five years. Backlog is $2.5bn or 78% of market cap. Gulf of Mexico (GoM)
and West Africa. They noted that market trends on new-builds are slowing a
bit, which is no surprise after the furious episode of construction over the last
18 months. Most operators are not inclined to order new until existing spec
rigs get contracts which could indicate a number of one-rig orders through
the year, but larger batches are not likely until the market absorbs the
current backlog.
BRS looks to have won a $4bn 13-year Search and Rescue contract in the
UK. 22 heavy helicopters, over a decades of work and revenue backlog 2x
your market cap is not a bad week’s worth of work.
Prospector Build Out. Prospector Offshore exercised options to build 2
additional (6 newbuilds) harsh environment high-spec jackups ($220M) at
Shanghai Waigaoqio with delivery in 2015/2016. Oro Negro also ordered 2
more jackups ($209M) from PPL with delivery in 2015. This brings the March
total for jackup orders to 6 after SDRL added to its orderbook in early-March.
The jackup orderbook stands at 94 rigs with scheduled deliveries at 49 in
2013; 28 in 2014, 14 in 2015 and 1 in 2016. In terms of 2013, jackup
newbuild deliveries – we will take the under. Additionally, Daewoo (Korea
yard) announced that it wants to get back into the jackup construction game.
HOS has moved the MPSV Iron Horse from LAM back into the GoM.
more, 6 pages, Download at the bottom of This Page |
