Companies that provide oil drilling services to the global energy industry saw their fleets fetch sharply higher market prices in the third quarter, as drilling demand increased along with oil prices.
Global drilling activity held strong in the third quarter, due to increasing demand in the U.S. and in international markets. The number of rigs dedicated to the international market jumped 5 percent from the prior-year period thanks to more robust activity in the Middle East. Drilling activity increased 20 percent in the U.S., despite persistently low natural gas prices.
The worldwide rig count rebounded by 333 rigs, up 12 percent year-over-year due to growth in U.S. and international markets, according to Calyon Securities analyst Mark S. Urness. On average, he expects offshore drillers to post an average of 44 percent earnings growth in the quarter and land drillers to show 48 percent growth.
"Earnings season for the offshore drillers is likely to be mixed," as issues related to operating costs _ particularly for GlobalSantaFe and Transocean _ temper stronger daily contract rates, he said.
Last week, Noble Corp. said third-quarter profit more than doubled on surging day rates. The rig contractor's "day rate" _ or the price an oil producer pays per day for use of a contractor's drilling rig _ surged to about $291,000 from $127,000 on deepwater units in the Gulf of Mexico. International jackup rates jumped 44 percent at the same time to about $79,000.
Ensco International Inc. also benefited from sharply higher contract rates in the third quarter. The drilling contractor reported Tuesday that profit nearly tripled in the period.
GlobalSantaFe is scheduled to report on Nov. 1, and Transocean and Todco are slated to post results Nov. 2. Diamond Offshore Drilling Inc. is expected to report earnings on Oct. 27.
source: BajaeNergy Blog
Manuel Torres Laveaga
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