Wednesday, January 19, 2011

Diamond Offshore (NYSE:DO) Fleet Report Shows Staggered Status

The Obama oil moratorium and snail's pace of awarding permits in the Gulf of Mexico after the BP (NYSE:BP) oil spill continues to negatively impact Diamond Offshore (NYSE:DO), as their recent fleet status report shows.

FBR says, "Following Diamond’s recent fleet status report, we are adjusting our estimates to account for new contracts, mobilizations, and the situation in the GOM following the moratorium. We are also introducing quarterly estimates for 2011...We are simultaneously decreasing our estimates for 2011 and increasing those for years 2010 and 2012. Diamond has found short-term work for a few of its rigs that will drive greater profits through the end of the year. These contracts, however, in some cases have also forced the deferment of scheduled maintenance and mobilizations, which will now take place in 2011, driving earnings lower."

FBR Capital reiterates an "Underperform" rating on Diamond Offshore (DO), which closed Tuesday at $75.0, up $0.11, or 0.15 percent. FBR has a price target of $56 on Diamond.

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