Sector Update: Energy


Energy stocks are higher, with the NYSE Energy Sector Index climbing 1.0% while shares of energy companies in the S&P 500 are up 1.3% as a group. Crude oil for November delivery is down $1.39 at $101.62 per barrel while November natural gas is up 3 cents to $3.76 per 1 million BTU.

In company news, SeaDrill Ltd ( SDRL ) is up 0.9% at $45.68 a share, reversing earlier declines and climbing to its best levels of the session after the marine oilfield services company this morning disclosed plans to sell a T-16 tender rig to Seadrill Partners LLC for around $107 million, excluding debt.

SDRL also said it remains committed as a long-term shareholder in North Atlantic Drilling after the companies abandoned talks to bring a new strategic investor as a majority owner in North Atlantic. Instead, North Atlantic now plans to seek to list as a separate public company on the New York Stock Exchange and expects to file a preliminary prospectus with regulators before the end of the year.

Also, SDRL last night said it expects to take an unspecified hit to its Q3 results after agreeing to a 37-day non-payment for its West Aquaris platform during recent repairs and modifications for use in ultra-deepwaters off eastern Canada. But while its near-term results may be hurt, the company said it is close to finalizing an 18-month contract extension for the rig through April 2017 that should be worth an additional $337 million to SDRL over the added term.

In other sector news,

(+) BHI, (+1.4%) U.S. onshore well count grows by 164 to 9,175 wells during Q3, up about 2% from a revised 9,011 wells at the end of Q2.

(+) INT, (+0.4%) Increases total revolving credit facility by $300 mln to $1.1 bln, also extending maturity date by over two years to October 2018. The facility has accordian feature allowing up to $150 mln in additional borrowing under certain circumstances.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: SDRL

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