Barclays on U.S. Oil Services & Drilling: Jackup Strength Builds; Floater Downtime Persists

Barclays on U.S. Oil Services & Drilling: Jackup Strength Builds; Floater Downtime Persists

Analyst, James C. West, said, "Four Fleet Status Updates: Four offshore drillers released fleet status reports including Transocean, Ensco, Diamond, and Hercules. The overall theme is jackup dayrates continue to climb and floaters continue to suffer unplanned downtime. There were a number of strong international and domestic awards for jackups across the board with notable strength in West Africa, the North Sea and the U.S. Gulf of Mexico. There were some favorable extensions for floaters; however, the main takeaway for floaters was unplanned downtime resulting from BOP and other critical equipment repairs. We note that this trend is tapering out but expect higher downtime and longer permitting lead times for floaters to be a new-normal in the post-Macondo heightened safety environment."

"Adjusting Estimates: As a result of these changes and other updates in the fleet status reports, we are adjusting estimates for Ensco (NYSE: ESV), Diamond (NYSE: DO), Hercules (Nasdaq: HERO), and Transocean (NYSE: RIG). We are adjusting our 4Q11 EPS for Ensco to $0.83 (from $0.97). For Diamond we are adjusting our 4Q11 EPS to $0.94 (from $0.90), and 2012 to $4.90 (from $4.85). For Hercules we are narrowing our 2012 estimated loss per share to $0.30 (from a loss of $0.50) and 2013 to -$0.15 (from -$0.35). For Transocean we are adjusting our 2012 EPS estimate to $2.90 (from $2.85)."

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