Sector Update: Energy Stocks Off Worst Levels of Session; Seadrill Ltd., Seadrill Partners at Multi-Year Lows After Ship Transaction
Top Energy Stocks
Energy stocks were off their worst levels of the session but remain sharply lower today with the NYSE Energy Sector Index sinking about 2.2% while shares of energy companies in the S&P 500 also were down 2.2% as a group. Crude oil for December delivery settled $1.59 lower at $77.19 per barrel while December natural gas was up another 8 cents to $4.13 per 1 million BTU.
In company news, shares of Seadrill Ltd ( SDRL ) and Seadrill Partners ( SDLP ) both fell Tuesday after the companies announced a deal where a SDLP subsidiary will acquire an ultra-deepwater drillship from SDRL for about $900 million, excluding $433 million in assumed debt.
The deal, slated to close on Friday, calls on Seadrill Capricorn Holdings LLC - a 51% owned SDLP subsidiary - to buy and operate the West Wela drillship following a series of purchases, contributions and assumption of debt. Based on SDLP's majority stake in Seadrill Capricorn, its share of the net purchase price will be around $238 million.
The West Wela is a sixth-generation dynamically positioned drillship delivered to SDRL 12 months ago and has been leased to BP plc ( BP ) since that time, generating $609,000 per day for the company.
SDLP is a limited master partnership formed by SDRL in October 2012 to own and operate drillships for the oilfield-services company. SDLP shares were down almost 4% in late afternoon trade at $23.50 each, earlier falling to a new all-time low of $23.06 a share. Over the past 12 months, the stock has fallen more than 28%.
SDRL shares also are lower today, retreating almost 9% to $20.27 apiece after today dropping to its worst share price since July 2010 at $20.21 a share. Its stock has declined about 56% over the past 12 months.
In other sector news,
(+) TDWL, Fiscal Q2 net income of $1.22 per share beats analyst view by $0.17 per share. Revenue climbs 8.0% year over year to $397.52 mln, beating Street estimates by around $5.28 mln.
(-) CRK, Q3 net loss of $0.05 per share lags Capital IQ consensus by $0.13 per share. Revenue climbs 30% year over year to $145 mln, trialing Street view by $9.1 mln.
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