Posts for Ticker ‘BAS’

Top 10 Analyst Upgrades & Downgrades (AZN, BAS, BRNC, BCS, DB, PCS, MYL, PTEN, PDC, WSH)

These are the top 10 early bird analyst upgrades and downgrades we have seen in Wall Street research calls early this Thursday morning with over two hours until the market opens:

AstraZeneca (AZN) Cut to Underperform at Jefferies.
Basic Energy Services (BAS) Cut to Sell at UBS.
Bronco Drilling (BRNC) Cut to Sell at UBS.
Barclays (BCS) Raised to Overweight at Morgan Stanley.
Deutsche Bank (DB) Raised to Overweight at MOrgan Stanley.
MetroPCS (PCS) remains Sell at Auriga.
Mylan Labs (MYL) Cut to Underperform at Bernstein.
Patterson-UTI (PTEN) Cut to Sell at UBS.
Pioneed Drilling (PDC) Cut to Sell at UBS.
Willis Group (WSH) Started as Buy at Sun Trust Robinson Humphrey.

JON C. OGG

Posted on: May 14, 2009 – 6:24 am in Analyst Calls, , , , , , , , , ,

Just How Bad is the News on Drilling? (BHI, BAS)

water-lilies8We’ve been tracking the rig count from Baker Hughes Inc. (NYSE:BHI) for a long time, and the bad news on North American drilling has finally tapered off. Now, Basic Energy Services (NYSE:BAS) has issued an interim report on its operating data for March 2009, and this is what the company has to say: “Drilling rig days for the month of March 2009 were 70 producing a rig utilization of 25%, an increase from 22% in February 2009 and a decrease from 93% in March 2008.” Read More »

Posted on: April 14, 2009 – 9:11 am in Oil & Gas, ,

Drillers Report Operations Blues (BAS, RIG)

Oil_well_image_2Oil field services company Basic Energy Services, Inc. (NYSE:BAS) reported this morning that December 2008 operations were even lower than expected. Drilling rig utilization reached just 66% in December, down from 83% in November and down 88% from December 2007. The company had projected quarterly declines of 4-6% in revenues for the fourth quarter, but is now expecting a revenue shortfall of 11% for the quarter. Basic is lowering its rates and reducing capital spending, choosing to focus "controlling expenses and preserving liquidity."  Basic may have trouble finding customers, but Transocean, Inc. (NYSE:RIG) is firing its customers.

Read More »

Posted on: January 13, 2009 – 1:47 pm in Oil & Gas, ,

Grey Wolf Nearly, Finally Merged (GW, PDS, BAS)

The shareholders of Grey Wolf, Inc. (NYSE:GW) have overwhelmingly chosen to accept cash instead of stock in Precision Drilling Trust (NYSE:PDS) as consideration for Precision’s buyout of Grey Wolf. We’ve been following the story for some months now, but Grey Wolf shareholders approved the merger this morning and the deed is now done.

Read More »

Posted on: December 23, 2008 – 11:28 am in Mergers and Buy Outs, Oil & Gas, , ,

Will Grey Wolf and Precision Drilling Finally Tie the Knot? (GW, PDS, BAS)

Oil_well_logo_2The buyout of US driller Grey Wolf (NYSE:GW) by Canadian drilling company Precision Drilling Trust (NYSE:PDS) got its start back in April, when oilfield services company Basic Energy Services (NYSE:BAS) made an offer to buy Grey Wolf. While Grey Wolf shareholders were considering that offer, Precision Drilling made an unsolicited bid for Grey Wolf that eventually topped out at $10/share.

Read More »

Posted on: November 17, 2008 – 9:02 am in Mergers and Buy Outs, Oil & Gas, , ,

Grey Wolf Finally Gets its Wish, Sort Of (GW, PDS, BAS)

Oil_well_logo_2The board of directors of Grey Wolf, Inc. (AMEX:GW) has been trying to sell the company for at least a couple of months at a higher price. Today, they appear to have gotten their wish. Sort of.  Canada’s Precision Drilling Trust (NYSE:PDS) and Grey Wolf have announced a definitive agreement under which Precision will acquire Grey Wolf for $5/share in cash and 0.1883 new units in Precision for each share of Grey Wolf. That comes to $1.12 billion in cash and 42 million units, worth about another $897 million.  In other words, $9.02 before any dilution and before the 7% "PDS" drop today.

Read More »

Posted on: August 25, 2008 – 10:05 am in Mergers and Buy Outs, Oil & Gas, , ,

Oil Services Better Insulated Than Most Energy Sub-Sectors (RIG, DVR, PDS, WFT, NOV, BJS, BHI, BAS, HAL, SLB, SII)

Oil_well_logo_2_2Oil Services are deemed by many market pundits as being more insulated than integrated oils, refiners, and other sub-sectors of the energy sector for oil and gas.  While these frequently move in-line with oil prices and with the sector, they are expected to have much more stable earnings than counterparts elsewhere in the sector.  Many of the oilfield services shares are down nearly 20% or more along with a major drop in oil prices. Transocean’s shares are holding at less than 1% down from 52-week highs, probably on the strength of the company’s bookings.

Transocean Inc. (NYSE: RIG) has given back nearly one-quarter of its value from its highs.  The worst performer among the larger players was CalDive (NYSE:DVR), down 43% from its 52-week high. Precision Drilling Trust (NYSE:PDS) is down about 30%, Weatherford (NYSE:WFT) is off about 27%, and National Oilwell Varco (NYSE:NOV) and BJ Services (NYSE:BJS) are down about 25%. A host of others are off around 20%: Baker Hughes (NYSE:BHI) at 22%; Basic Services (NYSE:BAS) at 21%; Halliburton (NYSE:HAL) at 20%; and Schlumberger (NYSE:SLB) and Smith International (NYSE:SII) are off about 19%.

Read More »

Posted on: August 20, 2008 – 11:17 am in Oil & Gas, , , , , , , , , , ,

Basic Energy Reports on June Operations; Gets Flak/Props on Grey Wolf Merger (BAS, GW, PDS, RMG)

Oilfield services company Basic Energy Services (NYSE:BAS) released its June operations report this morning. The company has increased its rig count by one over May, and thirty since a year ago. Rig utilization stands at 79%, and drilling utilization is down a few points from May, but up from 63% to 83% over June 2007. These are solid numbers, and the company’s president and CEO expects improvements in pricing to offset higher fuel and labor costs.

The interesting news is behind the numbers (as usual). In April, Basic announced a "merger of equals" with Grey Wolf (NYSE:GW), a well driller. The surviving entity will retain the Grey Wolf name and NYSE ticker. Grey Wolf shareholders will receive $1.82 in cash plus one share of stock in the new company in exchange for four shares of existing Grey Wolf stock. Basic stockholders receive $6.70 in cash and 0.91975 shares of stock in the new company for each share of Basic stock. Then, in early June, Canada’s Precision Drilling Trust (NYSE:PDS) made an unsolicited offer of $9.00/share in cash and stock for Grey Wolf. Precision has bumped its offer twice, and it now stands at $10.00/share. Precision, like Grey Wolf, is a drilling company, and the conventional wisdom seems to be that the deal between Precision and Grey Wolf makes more sense than the Grey Wolf/Basic deal because there is little chance for cost-cutting in the Basic merger.

On Monday, RiskMetrics (NYSE:RMG) weighed in with a report questioning the Basic/Grey Wolf merger, and raising questions of conflict of interest on Grey Wolf’s Board. Yesterday, Egan-Jones Proxy Services recommended that Grey Wolf stockholders approve the Basic merger at the special meeting called for July 15th. Grey Wolf issued a press release citing Egan-Jones’ recommendation.

The combination of Precision Drilling and Grey Wolf yields a larger drilling company, but it’s hard to see how there will be significant cost savings. The Basic/Grey Wolf merger gives Grey Wolf some additional drilling capability, plus services such as completion, workovers, and abandonment. Strategically, the latter deal seems to position the merged company better, but it won’t pay off in a quarter or two. To some shareholders, that quick payoff trumps everything else.   

Paul Ausick
July 9, 2008

Posted on: July 9, 2008 – 10:08 am in Mergers and Buy Outs, Oil & Gas, , , ,