Morningstar Rating

Stock Research and Analysis

by Stephen Ellis

Bulls Say

Despite low price tags, Ensco's new rigs are obtaining high day rates. We think the firm is earning some of the highest aftertax returns in the industry on its new rigs.
We estimate the net asset value of Ensco's fleet to be about $10.7 billion, or $46 per share.
Ensco's move to acquire Pride and order new rigs in 2011 is paying off. The firm now has a large collection of new rigs and more rigs under construction that will benefit from higher day rates in a tight deep-water market. Read more 

Bears Say

A decline in day rates can have a substantial impact on Ensco. Semisubmersible day rates declined 21% from 2002 to 2004 and 70% from 1998 to 1999. Jackup day rates declined 70% from 1997 to 1999.
About 50% of the jackup market spending is controlled by 10 companies. This means that a decrease in spending by one of these companies can have a significant effect on Ensco.
There are many jackups under construction, and most of them do not have a contract. The large order book could push the premium jackup market into oversupply. Read more 

Management

CEO Daniel Rabun has led Ensco since 2007 but announced his retirement from the firm in late 2013. We expect a new CEO to be appointed sometime in 2014. Rabun joined the firm in March 2006 as director and president after serving as the company's external   Read more 

Profile

Ensco owns one of the newest jackup and deep-water fleets in the contract drilling industry, which drills for oil and natural gas globally. The firm is based in London,   Read more 

First Name
Last Name
Email Address
Zip Code
Create Password
Verify Password
(6-15 characters; case sensitive)

Go North of the Border for These Energy Picks 
Watch more 

Premium Membership

View all of our analyst reports with a free trial to Morningstar.com Premium.