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Diamond Offshore Drilling (NYSE: DO) volatility slightly higher as DO at record high. DO, a drilling service provider to the energy industry, closed at $113.04. RIG and GSF, drilling service providers, announced a merger of equals on 7/23. DO August option implied volatility of 36 is above its 26-week average of 33 according to Track Data, suggesting slightly larger price risk.
Ensco International (NYSE: ESV) volatility elevated as ESV at record high. ESV, an offshore contract drilling company, closed at $65.90. RIG and GSF, drilling service providers, announced a merger of equals on 7/23. ESV has a market cap of $9.8 billion with long-term debt of $308 million. ESV had March 2007 quarterly net income of $232 million on total revenue of $514 million. LYON has a $59 price target on ESV. ESV August option implied volatility of 40 is above its 26-week average of 33 according to Track Data, indicating larger price fluctuations.
Atwood Oceanics (NYSE: ATW) August implied volatility elevated as ATW at record high. ATW is engaged in the business of international offshore drilling of exploratory and developmental oil and gas wells and related support management and consulting services. ATW closed at $74.36. ATW will report EPS on August 7th. RIG and GSF, drilling service providers, announced a merger of equals on 7/23. ATW August option implied volatility of 39 is above its 26-week average of 33 according to Track Data, suggesting larger risk.
Rowan (NYSE: RDC) August volatility elevated into EPS. RDC, a provider of international and domestic offshore contract drilling services, will announce EPS on August 2nd. Morgan Keegan says: "We are lowering our estimates on RDC as we build in lower day rate assumptions and a delayed recovery for US Gulf commodity jackups." RIG and GSF, drilling service providers, announced a merger of equals on 7/23. RDC August option implied volatility of 46 is above its 26-week average of 32 according to Track Data, suggesting larger risk.
Daily Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
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Reader Comments (Page 1 of 1)
7-24-2007 @ 1:07PM
Michael Schneider said...
Analysts expect more M&A activity among the drillers, particularly deep water players like Diamond Offshore. There is also some concern about oil prices which are in a correction and nat gas prices which are responding to a cool summer. The oil price correction is not a surprise esp. with nat gas falling-- I wrote in the free Barrel View e-mailing this week that anything can happen with oil prices but the best bet is for a correction or pause before moving higher long term. Goldman Sachs came out last week with a report suggesting that the risks of an oil price spike are higher than last year and oil could hit $95 soon. This is still a reasonable possibility despite declines today because the reasons they list are still present-- oil is high though and a rest made sense especially with some statements from OPEC and possible progress with Iran and also the lack of a hurricane.
An item about the Goldman Sachs market-moving report (it helped move oil higher last week) and a just-posted item listing takeover bets in the drilling sector are available at http://www.Barrelomoney.com. You can also sign the private Guest Book at http://www.Barrelomoney.com if you want to receive the free Barrel View mailing.