Rowan Profits Jump in 3Q
Rowan Companies, Inc. said profit in the third quarter jumped 50% on overseas demand for its offshore oil rigs and drilling services. The Houston drilling contractor and equipment maker said profit in the three months ended Sept. 30 rose to $130.8m, or $1.16 a share, from $87m, or 78 cents a share, in the year-earlier period. Profit in the most recent quarter included a penny a share in gains on asset sales. Revenue rose 20% to $502.2m, short of the $530m anticipated by Wall Street. Shares fell 2.1% to $38.17 by the close compared with a 1% drop in the Philadelphia Oil Service Index. Rowan said revenue from its drilling operations rose 27% to $369m as the pace of activity on its offshore rigs quickened, and it got paid more for daily operations.
U.S. Offshore Driller Consolidation Expected in 2007
According to Reuters, tight demand, attractive valuations and a Norwegian company that has said it is ready to get bigger have sparked widespread expectation for consolidation in the U.S. offshore drilling sector in 2007. Possible scenarios include a leveraged buyout by a private equity firm, large-scale recapitalizations or the acquisition of a U.S. driller by an overseas company, U.S. analysts said. And a lot of industry attention is focused on Norwegian driller SeaDrill Ltd., which said in no uncertain terms in November that it was looking to grow. SeaDrill is controlled by Norwegian shipping magnate John Fredriksen, who analysts credit with the know-how and experience to make an acquisition work, citing his leadership in building tanker company Frontline Ltd.
Norwegian Petro Geo-Services Shares Dip 5.2 Percent
Shares in Norwegian offshore services and seismic firm Petroleum Geo-Services (PGS) slid on Wednesday on concerns that the sector could be hit by a U.S.-led slowdown, analysts said. The company's shares were down 5.2 percent on the Oslo bourse at 91.0 Norwegian crowns ($10.01), falling in line with other companies in the international sector. The Philadelphia Oil Service Index, which is comprised of the biggest companies in the U.S. offshore oil service sector, was down 4.20 percent on Tuesday; at the same time the Oslo all-share index was up 0.14 percent. PGS, with core businesses in geophysical services and production services, was hit on the back by a sharp profit warning on Tuesday from Veritas, a PGS peer company based in Houston, Texas.
