Atwood Oceanics Inc buy DomRuinart

Takeover play

Ich tippe mal Transocean wird hier zuschlagen:

IsAtwood Oceanics again a possible takeover target?

Thecompany has a relatively young, high-spec rig fleet and 50 years' experiencedrilling shallow-to-ultra-deepwater wells for explorers and producers,particularly internationally.

Sep13, 2016 4:34 PM EDT 

Stocksof oilfield services companies have been badly beaten down during the oil andgas downturn. One that has been especially bruised is Atwood Oceanics (ATW) ,which could make it a tasty takeover target.

TheHouston company's stock price has been cut in half over the last 12 months versusa 33% drop for its industry. The reasons? According to a note from Tudor, Pickering,Holt on Monday, it has a relative lack of near-term contract coverage - four ofits rigs are either idled or stacked and three more are rolling off contract bythe end of the year, joining two new, uncontracted floating rigs it has in itsinventory. Those numbers matter given that Atwood's total marketed fleet isonly made up of a dozen rigs.

Thereare also concerns over its shrinking funds. According to TPH analyst TaylorZurcher, Byron Pope and George O'Leary, the company has a liquidity profile of$715 million -- $160 million in cash plus a $555 million revolving creditfacility. It plans to spend $94 million next year and $306 million in 2018 onrig payments. But after that, it will have $840 million due under its revolverMay 2019 and $449 million in senior notes due in 2020.

However,Atwood recently secured waivers that effectively eliminate the implementationof any restrictive debt covenants until the third quarter of 2018. Factoring inthe company's contract backlog and maintenance capex requirements, TPH seesAtwood as still having a couple more years of liquidity runway -- likely untilmid-2018 -- before any notable funding hurdles come into play.

TPHnoted that the company has a relatively young, high-spec rig fleet, with sevenfloaters and five jackups with an average age of around seven years, includingthe two newbuild drillships. It also has nearly 50 years' experience drillingshallow-to-ultra-deepwater wells for explorers and producers, particularlyinternationally. For those reasons, TPH has put the company on its short listof attractive take-out candidates.

Atwoodwas rumored to be acquisition fodder in 2009, which the company denied, andagain in the summer of 2014 - before oil prices began to slide. It's been onThe Deal's potential activist target list for two years.

Possiblebuyers include Noble  (NE) , although itsstock has been dragging recently; Diamond Offshore  (DO) , which is partially owned by Loews (L), whose CEO James Tisch has bought oilfield services equipment during previousdownturns ("Trouble is opportunity," he said last year); and NaborsIndustries (NBR) , which is looking better now that the overhang of bankruptaffiliate C&J Energy Services (CJES) is behind it and it has plans tointroduce a new rig platform technology in November.

Transocean(RIG) is another strong possibility, given that its former COO, Rob Saltiel, isAtwood's CEO. Last month it agreed to buy all of the outstanding units ofoffshore rig affiliate Transocean Partners (RIGP) for $250 million in stock,which will simplify its structure and bring in more cash.

Sowhen might the oilfield services industry turn around? TPH thinks offshore rigdemand likely finds its cyclical trough sometime in mid- to late 2017 beforestarting a gradual recovery through year-end 2018. In the meantime, expectconsolidation in the sector as a way for companies to pick up assets on thecheap and eliminate some of the competition, although any strategic deals willprobably be stock-for-stock as many potential acquirers are already saddledwith heavy debt loads, TPH said.

Quelle:TheStreet, Inc.