Despite my Kool Aid infusion I am still quite bearish and I view this period akin to Sep/Oct 2007 when we partook in the foolishness to make money but realizing there were more shoes to drop. I am sort of laughing at how the market goes up on $110, $115, $120, $125? oil ... as if it won't have any effect on profits or people across the globe. It is essentially a world tax on all productivity and profit. But oh well, it won't matter until it matters. If we cannot break through this 200 day moving average I would not be surprised to see a meaningful move downward - we have ignored the facts for about 6 weeks now since the "Fed put" was brought underneath the market via Bear Stearns. At some point ignorance must turn back to reality...
On to the earnings reports.
Deep sea oil driller Transocean (RIG) reports a doubling of profits
- Transocean Inc (RIG), the world's largest oil and gas drilling contractor, said on Wednesday quarterly profit more than doubled, beating Wall Street expectations, on higher rates for its deepwater rigs and lower-than-expected expenses.
- Record high crude oil prices have created a boom in demand for floating rigs and drill ships that operate in the deepest waters. Drilling contractors have benefited as tight supplies have pushed daily rig rates above $600,000 in some cases.
- First-quarter profit jumped to $1.19 billion, or $3.71 per share, from $553 million, or $2.62 per share, a year earlier. Excluding one-time items, the company earned $3.80 a share. Analysts, on average, had expected $3.32, according to Reuters Estimates.
- "The beat was mainly due to lower operating expenses," Mark Urness, oilfield service analyst at Calyon Securities, said. "It's probably deferred maintenance, so it will come back later in the year. Still it's still a good quarter."
- Average daily rental rates, or dayrates, for the Houston company's total fleet rose 15.6 percent to $229,000. The increase in average dayrate was seen in all categories, primarily due to rigs starting new contracts at the higher dayrates, Transocean said.
- Costs for the first quarter of 2008 benefited from the postponement of several shipyard and major maintenance projects to later in the year, according to the company.
- Devon Energy Corp., the largest U.S.-based independent oil and natural gas exploration and production company, said Wednesday its first-quarter profit rose 15 percent as higher prices and production offset one-time charges and increased expenses.
- Excluding one-time charges -- including a $780 million loss on derivatives instruments due to rising natural gas prices -- the company posted earnings per share of $2.74.
- Analysts polled by Thomson Financial expected, on average, earnings per share of $2.33.
- Production rose 9 percent over the year-earlier quarter to 640,000 barrels of oil equivalent per day. The company's average price of natural gas rose to $8.03 per thousand cubic feet, from $6.77 per thousand cubic feet, and the average price of crude oil rose to $97.67 per 42-gallon barrel, from $58.33 per barrel.
- Combined, the company's average oil, gas and natural-gas liquids production from continuing operations was 640,000 oil-equivalent barrels a day, up 9%. The production growth was concentrated in onshore fields within the United States and Canada.
- Devon's net production from the Barnett Shale field in northern Texas averaged a record 995 million cubic feet of gas equivalent a day in the first quarter, up 36%. We can grow that for a long time to come. That's what's exciting," Devon CEO Larry Nichols said in a CNBC interview.
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3 comments:
DVN and RIG are mixed today because the have run up in the last two weeks in anticipation of the great earnings, this is blip on their charts, i would buy on this temporary dip. It's beginning to feel the the Goldman foecast of $150-200 oil will be correct. This US government is just out to lunch. Maybe a 3 house sweep by the Dems will bring action.
Last I checked the Dems are half the government?
It won't change until national crisis and people are up in arms and screaming at top of the lungs. Until then, lobbyists win - regardless of Dem or Rep
RIG is a beast, that's all there is to it. They're the largest in the space and they still somehow have ridiculously cheap valuation. Rising dayrates every quarter. winner.
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