Atwood Oceanics, Inc. (ATW)

[eastunder]

Offshore drillers rated 'Outperform'

Credit Suisse analyst sees promise in offshore drillers; rates 5 at 'Outperform'
Associated Press – 3 hours ago.. .

http://finance.yahoo.com/news/offshore-drillers-rated-outperform-165934852.html


NEW YORK (AP) -- An analyst wrote in a note to investors Wednesday that offshore drilling companies are under-appreciated, and he put bullish ratings on five of them.

Credit Suisse analyst Gregory Lewis put an "Outperform" rating on shares of five drilling companies — Rowan Cos., Noble Corp., Atwood Oceanics Inc., Diamond Offshore Drilling Inc., and Ocean Rig UDW Inc.

Ultra-deepwater drilling "will be the driving force shaping the next few years in the offshore drilling market," Lewis wrote. Companies can buy a new drillship for $650 million, to be delivered in 2014-2015, and then rent it out for $600,000 a day — bringing an adjusted profit of almost $400 million in the ship's first three years. "Not too shabby," he wrote.

Among companies with ultra-deepwater operations, Atwood Oceanics shares rose 22 cents to $45.73, Diamond shares rose 6 cents to $66.36, and Ocean Rig shares rose 7 cents to $16.41 in afternoon trading.

Meanwhile, rates have also been rising for larger-capacity drilling rigs, so companies that operate them are seeing record profit margins and should do well, Lewis wrote. Those include Rowan and Noble. Rowan shares rose 15 cents to $35.43, and Noble shares fell 1 cent to $37.89.