A Closer Look at Ensco’s Q2 Results

Ensco plc recently announced second quarter 2010 earnings of $126.3 million, or $0.89 per share. As expected, the results were negatively impacted by lower utilization for the fleet as well as lower average dayrates. Contract drilling revenues were $406.3 million compared to $449.4 million for the first quarter. Second quarter 2009 contract drilling revenues were $497.3 million. The company ended the quarter with $1.2 billion of cash and tangible book value of $5.4 billion, or approximately $38 per share. The long term debt to capital ratio was 4 percent and total contract backlog was $2.6 billion.

Einhorn Comments on Ensco Position in Q2 Letter

Last week, we reported that David Einhorn’s Greenlight Capital took a large position in Ensco plc during the second quarter. Ensco was profiled in an article on The Rational Walk in early June and the company is scheduled to report second quarter earnings on Thursday, July 22. Here is what Mr. Einhorn had to say about the Ensco purchase in his letter to shareholders dated July 16.

Einhorn’s Greenlight Capital Takes Large Position in Ensco

Einhorn’s Greenlight Capital Takes Large Position in Ensco

In a sign that value oriented hedge fund managers are continuing to wade into the depressed offshore drilling sector, David Einhorn’s Greenlight Capital has reported a 5.2 percent stake in Ensco plc as of June 30, 2010. Mr. Einhorn controls 7.4 million shares with a market value of slightly over $300 million at today’s closing price. This represents a substantial commitment for Mr. Einhorn’s funds which were valued at $2.93 billion as of March 31. It appears that his purchases were definitely made in the second quarter, and most likely were made after the Deepwater Horizon disaster. Read this article for more details.

Ensco International Profile and Analysis

Ensco International Profile and Analysis

Ensco International plc is an offshore contract drilling company that provides services to oil majors and independent oil exploration firms. The company has historically focused on jackup rigs designed for relatively shallow water but has devoted the majority of capital expenditures in recent years to build up a fleet of semisubmersible rigs capable of deepwater operations. Ensco has a fleet of 45 mobile offshore drilling units comprised of four semisubmersibles, 40 jackups, and one barge rig. In addition, the company has one new semisubmersible unit ready for deployment in August and three semisubmersible units scheduled for delivery in 2011 and 2012. Read this article for more details.


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