We sold the last of the position (0.5% stake) today in the low $41s on the spike post earnings. We've owned this name for 2 round trips in the fund and are up overall, but a small loss on the last iteration. Utilization rates on their midwater rigs were horrid actually, but we owned it for the deepwater rigs. But again, individual fundamentals mean nothing in this group - anything 6 degrees of oil trades with oil. Technically the stock bounced to the 50 day moving average and then was turned back on its initial probe there this morning.
- Oil and gas driller Pride International Inc (PDE) posted higher second-quarter profit, helped by increased dayrates for its deepwater and midwater rigs offsetting the lower utilization levels.
- Net income for the quarter was $187.7 million, or $1.07 per share, compared with $146.1 million, or 83 cents a share, a year ago.
- The company posted income from continuing operations of $151.6 million, or 87 cents a share, compared with $120.1 million, or 68 cents a share, a year ago. The company's latest quarter included a gain of 7 cents a share related to the sale of its platform rig fleet.
- Revenue rose more than 5 percent to $560.3 million.
- Analysts on average expected the company to earn 76 cents a share, before special items, on revenue of $557.6 million, according to Reuters Estimates.
- Average daily revenue for the company's deepwater rigs rose more than 26 percent to $298,400.Utilization for the deepwater rigs was 96 percent during the quarter, compared with 97 percent last year.
- Average daily revenue for midwater rigs rose more than 7 percent to $217,800. Utilization for midwater rigs was 68 percent, compared with 86 percent last year.
2 comments:
Mark,
I exited RIG a few months back and was planning on reestabilishing a position on this drop in crude. I was in the process of researching RIG's peers as alternatives(specifically names with deep sea fleets) and stumbled on PDE, your blog and eventually ATW. You mention "this is not my favorite name in the space;" do you have a favorite name in the space? Do you see any advantage in the (relative) stability of a large-cap over the potential upside via acquistion of a small/mid-cap?
Hi Defense
Congrats on your exit at the opportune time
I probably like ATW the best but RIG is excellent, but GSF brought a lot of shallower rigs with it. DO is another name in the space.
Right now I see no advantages of one versus the other - they are all being sold off. RIG you would think has the most stability. But as I wrote last week its chart is a "sell" not buy right now. New higher rates on each individual rig benefit the smaller firms more, but for new build out of ships RIG is where it is at.
But right now the differences between companies mean little. Until oil stabilizes (I've been guessing 100-110) there should be continued pressure on the group.
I was hoping PDE would be bought out simply because there was another company that has built a stake in it, so I was hoping that was an obvious trade. Maybe with the lower valuations we will begin to see acquisitions roll.
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