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Ensco's (ESV) Jack-Up Rig to Drill Offshore Oil Wells in UK

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Ensco plc has signed a letter of intent for one of its jack-up rigs, per media reports. The rig will be working for two offshore wells of Corallian Energy — an upstream energy firm in the U.K.

Corallian Energy operates the licenses P1918 and P2235 where the respective wells Colter and Wick are situated. Per Corallian Energy, the energy players intend to start drilling in either the July to September quarter or the October to December quarter of this year.

Investor should know that the Colter well is located next to the Wytch Farm oil field. The prolific field, situated onshore Europe, has recorded the production of more than 400 million barrels of crude until now, per media reports.

We believe that Ensco has the expertise to conduct drilling of Colter and Wick wells safely and outperform its customer Corallian Energy’s expectations. According to the survey by EnergyPoint Research, Ensco is leading the list of drillers as per customer feedback.

The rig contact will help improve Ensco’s net operating cashflows which deteriorated recently. The trailing 12-month net operating cashflow of Ensco stands at $194 million, down 25.1% from $259 million in 2017.

Headquartered in London, this offshore contract driller has a positive earnings surprise of 17.2% for the last four quarters although the firm’s first-quarter 2018 bottom line failed to beat the Zacks Consensus Estimate.

However, the company’s pricing chat is not impressive. Over the past year, the stock has lost 7.2%, underperforming the industry’s 10.7% gain.

 

 

Ensco currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, better-ranked players in the energy sector include BP plc (BP - Free Report) , WildHorse Resource Development Corporation and W&T Offshore, Inc. (WTI - Free Report) . BP and WildHorse sport a Zacks Rank #1 (Strong Buy), while W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BP managed to beat the Zacks Consensus Estimate in three of the last four quarters.

WildHorse is expected to see year-over-year earnings growth of 288.4% in 2018.

W&T Offshore, Inc. will likely witness earnings growth of 7.1% in 2018.

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