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Oil and Gas Drilling and Exploration

Individual company worksheets may be downloaded by simply clicking on the company name.

Diamond Offshore Drilling , Inc.(NYSE: DO) – FYE 12/2016 – OVER VALUED – The stock is currently trading at levels above my $40 fair value estimate – Please See Linked Worksheet

Ensco plc(NYSE: ESV) – FYE 12/2016 – UNDER VALUED – The stock is currently trading at levels below my $48 fair value estimate – Please See Linked Worksheet

Helmerich and Payne, Inc.
For fiscal 2017 the story was earnings. The company acquired great technology during the year with the acquisition of Motive Technologies and their proprietary Bit Guidance System, but the acquisition happened too late in the fiscal year for it to help earnings. In the end, y-o-y earnings decreased by 23%. Debt remained at prior year levels, Free Cash Flow was lower by 32%, Capex was up 55%, Cash and Short-Term Investments were lower by 41%, the company still has $1.3 billion in deferred taxes. In addition, the company is still battling the Venezuelan government over the nationalization of the company’s in country assets. Good luck with that.

Helmerich and Payne, Inc. (NYSE: HP) – FYE 09/2017 – FAIRLY VALUED – The stock is currently trading at levels in line with my $59 fair value estimate – Please See Linked Worksheet

Nabors Industries Ltd (NYSE: NBR) – FYE 12/2014

Patterson-UTI Energy, Inc.
Drilling companies continue to struggle and Patterson-UTI is no different. The company has moved aggressively to lower debt (down 30% y-o-y), as well as cut its dividend (down 60% y-o-y) and reduce its share repurchases (down 55% y-o-y). In addition the company is still working to acquire businesses in an effort to help grow earnings (down 55% y-o-y) even it is paying for much of these acquisition with company stock. In the end, management is doing what it can trying to weather the current oil pricing storm. I believe the company will survive will survive going forward, I just don’t see share prices rebounding much above $35 for the foreseeable future.

Patterson-UTI Energy, Inc. (Nasdaq: PTEN) – FYE 12/2016 – FAIRLY VALUED – The stock is currently trading at levels in line with my $28 fair value estimate – Please See Linked Worksheet

Rowan Companies, plc
It was good to see that y-o-y earnings grew 58% during this extended down market for drillers.The company made substantial captial outlays during FY 2014 taking delivery of 3 of 4 new drill ships, which are starting to generate returns in the current fiscal year. The company also entered into a 50/50 joint venture during FY 2016 with Saudi Aramco. The new venture will own, operate, and manage offshore drilling units in Saudi Arabia and will commence operations during FY 2017. Free Cash flow grew during the year with a y-o-y increase of 302% and Tangible Book value remained near $40. Going forward, the stock may perform well over the coming several years, especially as the JV arrangement starts to yield results.

Rowan Companies, plc (NYSE: RDC) – FYE 12/2016 – UNDER VALUED – The stock is currently trading at levels below my $128 fair value estimate – Please See Linked Worksheet

Transocean, Ltd. (NYSE: RIG) – FYE 12/2016

Unit Corporation (NYSE: UNT) – FYE 12/2016

Whiting Petroleum Corporation (NYSE: WLL) – FYE 12/2016

Please note that worksheets are updated basis the most current SEC 10-K ANNUAL filing.