Sector Update: Energy Stocks Off Worst Levels of Session; Seadrill Ltd., Seadrill Partners at Multi-Year Lows After Ship Transaction

Top Energy Stocks

XOM -0.98%

CVX -1.30%

COP -2.64%

SLB -2.58%

OXY -2.12%

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

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