Highpower International Inc. (NASDAQ:HPJ) Looks solid

Highpower International Inc. (NASDAQ:HPJ)

Highpower International Inc. (NASDAQ:HPJ) is based in China and was founded in 2001 as a clean energy group dedicated to the discovery, development, production and commercialization of rechargeable Ni-MH / Lithium batteries, power source and energy storage systems. HPJ shares traded around $1 for most of 2012 and 2013 but hit a high of over $8 in 2014. At the beginning of 2017 HPJ was trading cose to $2 but today, on heavy volumes, HPJ closed at $3.15.

Last week, Highpower International Inc. (NASDAQ:HPJ) provided unaudited Q4 and full year financial expectations. The release was eye-opening. For Q4, Highpower expects $53.9 million in revenues which is a 42.3% increase from the same quarter of the previous year. Q4 gross profit is expected at $10.9 million which is a 64.8% increase from Q4 2015. Q4 net income is expected to come in at $1.8 million which is a whopping 952% YoY increase. For 2016 revenues are expected at $173.9 million which is an 18.9% increase over 2015. 2016 net income is expected at $6.1 million which is a 58.7% increase from 2015.

Highpower International Inc. (NASDAQ:HPJ) has an enviable cash position. Reports put their cash per share at $2.99 which would indicate that the company has been trading below its cash levels for months. Despite its poor share performance, EPS has been impressive. In 2011 there was an EPS loss of $0.18 but has trended, mostly, up and EPS was at a profitable $0.26 in 2015. Sales have also been decent. In 2011 sales were reported at $110.6 million and that figure has improved to $146.2 million in 2015. HPJ is trading 91% above their 52-week low and has a Relative Strength Index figure of 80 which is teetering on overbought. In the meantime, the number of outstanding shares for Highpower International Inc. (NASDAQ:HPJ) has moved modestly. In 2011 there were 13.58 million outstanding HPJ shares and that figure expanded to 15.1 million in 2015.

3/14/2017
Ticker Symbol HPJ
Last Price a/o 4:00 PM EST  $                      3.15
Average Volume                      48,500
Market Cap (mlns)  $                    48.51
Sales (mlns) $157.80
Shares Outstanding (mlns) 15.4
Share Float (mlns) 8.97
Shortable Yes
Optionable Yes
Inside Ownership 40.75%
Short Float 0.36%
Short Interest Ratio 0.67
Quarterly Return 18.87%
YTD Return 34.04%
Year Return 31.89%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

VAALCO Energy, Inc. (NYSE:EGY) Q4 2016 Operating Income At $0.8 Million

VAALCO Energy, Inc. (NYSE:EGY)

VAALCO Energy, Inc. (NYSE:EGY) reported that operating income in Q4 2016 came at $0.8 million against a loss of $64.7 million in the same period, a year earlier. It closed acquisition deal of additional around 3% working stake in the Etame Marin block offshore Gabon. The company recorded an average production of 3,682 BOEPD in Q4 2016, above the guidance projection of 3,300 – 3,600 BOEPD.

It also successfully closed workovers on the Avouma 2H and South Tchibala 2H wells taking net production to 4,600 BOPD in January 2017. Year-end reserves came at 2.6 MMBOE, indicating 87% reserve replacement in offshore Gabon for 2016.

The update

For Q4 2016, VAALCO Energy, Inc. (NYSE:EGY) reported that loss from continuing operations stood at $3.4 million compared to $70.5 million in the same period, a year earlier. The loss in Q4 2015 comprised a non-cash impairment charge of $52.1 million mainly due to lower estimated oil prices.

As an outcome of the firm’s decision to discontinue its activities in Angola and pull out from its joint operating deal, the operating report of the Angola division have been stated as discontinued activities for all periods shown in the consolidated statements of operations.

VAALCO reported that the loss from discontinued operations in Q4 2016 stood at $0.3 million compared to $10.3 million in the prior year period.

The company successfully closed two well interventions using a cost effective hydraulic workover segment compared to the traditional process of mobilizing a drilling rig and reestablished over 1,000 BOPD of net production.

VAALCO Energy, Inc. (NYSE:EGY) added additional stake in its offshore Gabon via an acquisition. They were able to swap reserves nearly equal to production rate. In sum, they were able to implement on their corporate strategy and improve value via operational successes, opportunistic transactions and cost reductions.

Bounds added that looking forward to this year, they will maintain their focus on exploiting margins, delivering on their operational projections and executing on their strategic plan. Financially, they are planning to continue to support the balance sheet and establish a solid base of cash for upcoming development assignments.

In the last trading session, the stock price of VAALCO Energy, Inc. (NYSE:EGY) declined more than 1% to close the session at $1.05.

3/14/2017
Ticker Symbol EGY
Last Price a/o 3:21 PM EST  $1.05
Average Volume  565.16K
Market Cap (mlns)  60.45M
Shares Outstanding (mlns) 57.57M
Share Float (mlns) 50.22M
Inside Ownership 0.50%
Short Float 0.84%
Short Interest Ratio 0.74
Quarterly Return 25.90%
YTD Return 0.96%
Year Return -14.63%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Cobalt International Energy, Inc. (NYSE:CIE) Needs More Tome For Its North Platte #4 Sidetrack Well Operations

Cobalt International Energy, Inc. (NYSE:CIE)

In the last trading session, Cobalt International Energy, Inc. (NYSE:CIE) gained more than 1% to close at $0.508. With that it managed to erode a part of losses recorded earlier in the week after the firm reported a delay in announcing its fourth quarter and FY2016 financial report.

The update

Cobalt International Energy, Inc. (NYSE:CIE) reported that it requires more time to close the North Platte #4 sidetrack well operations and offer a more comprehensive update. The company stated that it obtained a continued listing standard communication from the NYSE after stock price averaged less than $1 in the previous 30-day period.

In the last week of February, the company was notified by the NYSE that it is no longer in acquiescence with certain continued listing guidelines that are applicable to company. Its 30-day mean closing share price noted on February 27, 2017 stood at $0.94, in breach of the listing guideline given in Section 802.01C. This standard needs the trailing 30-day mean closing share price to stay above $1.

As noted in mentioned Section 802.01C, upon receiving communication, Cobalt International Energy, Inc. (NYSE:CIE) has a six-month period to reclaim compliance. During this cure period, the company must have a closing stock price of $1 or higher at the close of the cure period or on the last trading session of a given month. In addition, the company’s trailing 30-day mean closing share price should be $1 or higher.

Cobalt International Energy, Inc. (NYSE:CIE) has notified the NYSE of its intent to regain compliance within the 6-month period. During this cure period, Cobalt’s shares will continue to trade on the NYSE, depending on its ability to stay in compliance with other persistent listing standards. The communication obtained from the NYSE does not impact the ongoing operations of company, nor does it lead to any covenant violations for its unsecured or secured debt obligations.

Cobalt is an independent production and exploration firm operating primarily offshore of West Africa and deepwater U.S. Gulf of Mexico. The company was established in 2005 and is based in Houston, Texas.

Cobalt International previously reported that it has obtained a letter from the U.S. Department of Justice advising the company that the DOJ has ended its FCPA probe into Cobalt’s processes in Angola. This officially concludes the DOJ probe, which was the last lingering FCPA probe by any U.S. regulatory agency into company’s Angolan operations.

3/13/2017
Ticker Symbol CIE
Last Price a/o 3:21 PM EST  $0.51
Average Volume  6.29M
Market Cap (mlns)  206.01M
Shares Outstanding (mlns) 403.94M
Share Float (mlns) 397.02M
Inside Ownership 1.30%
Short Float 16.03%
Short Interest Ratio 10.11
Quarterly Return -61.94%
YTD Return -58.20%
Year Return -82.83%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Real Goods Solar, Inc. (NASDAQ:RGSE) Releases Business Update

Real Goods Solar, Inc. (NASDAQ:RGSE)

Real Goods Solar, Inc. (NASDAQ:RGSE) is a small commercial and residential solar firm established in 1978. The company released a business update after its recently closed offerings that recorded total net proceeds of $16 million. The firm provided an updated pro forma unaudited report with the additional capital and debt reimbursements as if concluded on December 31, 2016.

The update

Dennis Lacey, the CEO of Real Goods Solar, Inc. (NASDAQ:RGSE), reported that since their previous business update, they successfully took advantage of their capital market prospects and raised more capital. As intended, they are now Nasdaq compliant. They also have a stronger balance sheet and is now debt-free. The focus now turns to implementing their growth strategy. For this objective, they have recently expanded their sales organization.

The unaudited preliminary report is subject to the company’s quarterly closing and review processes, as well as the regular annual audit. These results are hence subject to modification. Real Goods Solar intends to submit its 2016 yearly report this week.

The pro forma report presents the firm’s balance sheet. The $16 million in net proceeds and the debt repayments closed in January. As previously stated on Form 8-Ks, the firm obtained notification from Nasdaq exchange that it is in compliance with the minimum trading price required of $1/share and the minimum stockholders’ stock requirement of $2.5 million.

As previously reported, Real Goods Solar, Inc. (NASDAQ:RGSE) repaid their revolving line of credit facility last month. With working capital and cash now in hand, there exists no motive to continue the revolving line of credit facility. The company terminated the linked supply deal with the financier which will permit them to buy materials at reduced price and increase their gross margin percentage.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Clean Energy Fuels Corp (NASDAQ:CLNE) Q4 2016 Revenue At $101.8 Million

Clean Energy Fuels Corp (NASDAQ:CLNE)

Clean Energy Fuels Corp (NASDAQ:CLNE) released operating report for Q4 2016 and year closed December 31, 2016. The firm recorded 84.1 million gallons in Q4 2016, a 7.4% jump from 78.3 million gallons over Q4 2015. For the year closed December 2016 the firm recorded 329 million gallons, a 6.6% jump from 308.5 million gallons recorded for the year closed December 31, 2015.

The financial update

Clean Energy reported that revenue for Q4 2016 came at $101.8 million compared to revenue of $119.3 million for Q4 2015. This decline can be largely accredited to the recognition of an entire year of alternative fuel tax credit revenue of $31 million in Q4 2015, while merely one quarter of VETC revenue of $7 million was recorded in Q4 2016.

Revenue from gallons recorded and revenue from station construction jumped in Q4 2016 versus the same period, a year earlier due to volume growth, the construction of new natural gas fueling stations, expansions of present natural gas fueling stations and increased effective prices by clients. Compressor sales dropped in Q4 2016 YoY basis following continued low international demand.

Clean Energy reported that revenue for FY2016 came at $402.7 million compared to revenue of $384.3 million for FY2015. Volume-related revenue and sales proceeds from station construction jumped in FY2016 versus FY2015. These increases were majorly offset by a drop in revenue from compressor sales. Moreover, VETC revenue dropped for the year mainly due to a change in the process of computing VETC that became effective at the start of 2016.

Andrew J. Littlefair, the President and CEO of Clean Energy, reported that the promising momentum continued in 2016 for company with volume growth, improved adjusted EBITDA, reduced debt balances and increased station builds. They continue to leverage their natural gas fueling setup by increasing volumes and at the same time lowering capital expenses and expenditures.

Clean Energy continues to be the market pioneer for the increasing count of fleets choosing to take benefit of natural gas as well as renewable natural gas as an instant, inexpensive and ecologically friendly substitute for vehicle fuel solution. In Q4 2016, on a GAAP basis, net loss for Q4 2016 came at $(3.9) million against a net loss for Q4 2015 of $(50.0) million. The report comprised a net gain of $9 million as a result of the debt reduction.

In the last trading session, the stock price of Clean Energy declined over 4% to close the session at $2.57. After the decline in last trading session, the market cap of firm now stands at $375.31 million.

3/08/2017
Ticker Symbol JONE
Last Price a/o 3:21 PM EST  2.70
Average Volume  1.83M
Market Cap (mlns)  362.86M
Shares Outstanding (mlns) 141.19M
Share Float (mlns) 121.99M
Inside Ownership 43.50%
Short Float 121.99%
Short Interest Ratio 3.71
Quarterly Return -26.57%
YTD Return -10.14%
Year Return 18.67%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Is Geopark Ltd (NYSE:GPRK) in Overbought Territory?

Geopark Ltd (NYSE:GPRK)

GeoPark is an independent Latin oil and gas explorer, operator and consolidator with oil and gas assets and growth platforms in Chile, Colombia, Brazil, Peru and Argentina. GeoPark Ltd (NYSE:GPRK) is currently ranked as the third largest private oil and gas operator in Colombia, the first private oil and gas producer in Chile, and owns a non-operating working interest in the largest non-associated producing gas field in Brazil.

GeoPark Ltd (NYSE:GPRK) released their Q4 2016 earnings report this evening. Q4 revenues were $60.3 million – up 32.8% YoY. That figure beat expectations by $2.2 million. However GPRK had a net loss of $26 million. Consolidated net revenues increased by 33% to $60.3 million in Q4 2016, compared to $45.4 million in Q4 2015. Their consolidated 2P reserves increased by 14% in 2016 to 142.8 mmboe compared to 2015. The increase in reserves mainly results from new discoveries in the Llanos 34 Block (GeoPark operated with 45% WI) in Colombia. Consolidated oil and gas production increased 2% to 23,593 boepd in Q4 2016 compared to 23,062 boepd in Q4 2015. The increase was mainly attributed to higher production in Colombia (with six new wells put into production in 2016), partially offset by lower production in Chile and Brazil.

Despite a drop in sales from 2014 ($428.7 million) to 2015 ($209.7 million), GPRK shares have performed well over the past year – gaining over 128%. YTD, GeoPark Ltd (NYSE:GPRK) is up over 43%. Some analysts believe that GPRK is overbought and point to an RSI figure of 78+ as an indicator of such. However GPRK is still about 1% lower than its 52-week high.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Jones Energy Inc (NYSE:JONE) Provides Corporate Updates

Jones Energy Inc (NYSE:JONE)

Jones Energy Inc (NYSE:JONE) released an operations update, its 2016 year-end reserves, its initial capital budget, and guidance for 2017. The company reported that first Merge wells the HARDY 25-11-6 1WH and BENNETT 24-11-6 1WH both drilled magnificently with closes underway. It started drilling third well, the BELYEU 33-9-5 1WH. Also, it added almost 3,140 net acres to its Merge position to-date subsequent to the acquisition closing. As of now, the firm’s Merge position is almost 21,000 net acres.

Operational update

The initial capital budget for this year stands at $275 million, of which around $110 million will be focused on Merge drilling and closures. Production for FY2016 was 19.2 MBoe/d while oil production for 4Q2016 was 4.5 MBbl/d.  As per operational update, proved reserves at close of year stood at 105.2 MMBoe grounded on SEC pricing1 while proved oil reserves stood at 23.6 MMBbl. Also, proved reserves at the close of year 2016 came at 82.1 MMBoe in the Cleveland while it was 2.4 MMBoe in the Merge. The liquidity stood at almost $282 million as of close of December 2016.

The CEO speaks

Jonny Jones, the Chairman and CEO of Jones Energy, reported that 2016 was a remarkable year for their company, as they took major steps to enhance their balance sheet and bring down costs permitting them to restart their Cleveland drilling program. Moreover, the company reported the acquisition of almost 18,000 net acre area in the Merge, which is a leading operated site in the Eastern Anadarko Basin.

Jones Energy CEO reported that this development has transformed their opportunity set as well as their asset base. The Merge program started in 2016 with the preliminary rig arranged to the field drilling a 2-well pad. It is initial days, but the management is positive that additional upside from their acquisition assumptions have emerged with increased potential landing points noted, counterbalance operator density assessments and early-time outperformance from neighboring wells.

Strong report from offset operators and increased activity in the region additionally supports their beliefs that Merge is a leading U.S. onshore resource plays. Jones further added that last year they met and surpassed their goals, increasing production guidance by 7% and enhancing cost structure across the managed program.

The shares of Jones Energy reported that gained over 3% on Monday, and ended the session at $3.25. With the last reported gains, the market cap of firm now stands at $277.83 million.

3/07/2017
Ticker Symbol JONE
Last Price a/o 3:21 PM EST  $3.15
Average Volume  1.02M
Market Cap (mlns)  286.72M
Sales (mlns) 126.60M
Shares Outstanding (mlns) 88.22M
Share Float (mlns) 54.96M
Shortable Yes
Optionable Yes
Inside Ownership 1.70%
Short Float 28.93%
Short Interest Ratio 15.54
Quarterly Return -29.35%
YTD Return -35.00%
Year Return 28.46%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Pacific Ethanol, Inc. (NASD:PEIX) Beats Estimates but Market Sells

Pacific Ethanol, Inc. (NASD:PEIX)

Pacific Ethanol, Inc. (NASD:PEIX) gapped up on the open and gained 12% before pulling back into negative territory. Yesterday PEIX shares closed at $8.35 and this morning reached $9.35 based on a Q4 and 2016 full-year earnings report that beat analyst expectations. Trading has been around three times the average daily volume.

For Q4 2016, Pacific Ethanol, Inc. (NASD:PEIX) reported net income of $13.1 million – a YoY gain of 17%. Q4 2016 operating income was $18.8 million versus $0.5 million for the same period last year. Net income available to common stockholders was $12.6 million, or $0.30/share, compared to a net loss of $1.1 million, or $0.03/share in Q4 2015.

For the year 2016, net sales were $1,624.8 million, compared to $1,191.2 million in 2015. Gross profit was $51.8 million, compared to $7.4 million in 2015. Net income available to common stockholders was $0.1 million, or $0.00/share, compared to a 2015 net loss of $20.1 million, or $0.60/share.

Pacific Ethanol is a producer and marketer of low-carbon renewable fuels in the Western United States. Pacific Ethanol, Inc. (NASD:PEIX) owns eight ethanol production facilities, four in the Western states of California, Oregon, and Idaho, and four in the Midwestern states of Illinois and Nebraska. The plants have a combined production capacity of 515 million gallons per year, produce over 1 million tons per year of ethanol co-products such as wet and dry distiller grains, wet and dry corn gluten feed, condensed distillers solubles, corn gluten meal, corn germ, corn oil, distillers yeast, and CO2.

Ethanol could be considered an integral part of the country’s transportation fuel market, currently representing nearly 10% of the overall gasoline supply in the United States. Ethanol has many advantages as a component of our transportation fuels. It is made from domestically produced renewable resources and reduces air pollution and carbon dioxide. With its high octane rating, ethanol is claimed to add value to gasoline blends. Ethanol also helps consumers by increasing domestic fuel supplies and refining capacity.

Pacific Ethanol, Inc. (NASD:PEIX) sales have increased from $900 million in 2011 to $1.19 billion in 2015. EPS has been erratic. In 2011 PEIX shareholders experienced a positive EPS of $0.80 – and also in 2014 when the company posted a profit of $0.93 EPS. However there were EPS losses in 2012 (-$2.81), 2013 (-$0.17), and in 2015 (-$0.60). PEIX is currently trading down over 3% below yesterday’s close.

3/2/2017
Ticker Symbol PEIX
Last Price a/o 2:27 PM EST  $                      8.10
Average Volume                    568,000
Market Cap (mlns)  $                  358.13
Sales (mlns) $1,560.00
Shares Outstanding (mlns) 42.89
Share Float (mlns) 34.89
Shortable Yes
Optionable Yes
Inside Ownership 0.20%
Short Float 2.87%
Short Interest Ratio 1.77
Quarterly Return -1.18%
YTD Return -12.11%
Year Return 105.16%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

W&T Offshore Inc. (NYSE:WTI) Could be on the Launch Pad

W&T Offshore Inc. (NYSE:WTI)

W&T Offshore Inc. (NYSE:WTI) is up for the mast month after the independent oil and gas drilling company posted 4th quarter and 2016 results. WTI shares closed at $2.62 on Wednesday but have reached $3.08 in inter-day trading – a gain of over 17%. Volumes have already doubled yesterday’s total.

W&T Offshore Inc. (NYSE:WTI) total annual production was down 1.7 million barrels of oil equivalent (“MMBoe”) in Q4 2016 – down 9.9% from Q4 2015. The lower production was due to natural production declines, well performance, pipeline outages along with field and platform maintenance.  This under-performance was partially offset by new oil production from the development of certain deepwater fields. For the quarter, revenues were $115.2 million, 72% of which was from oil and NGLs, and were up $11.1 million compared to Q4 2015.

Houston, TX-based W&T Offshore, Inc. (NYSE:WTI) is an independent oil and natural gas producer. The company acquires, explores, and develops oil and natural gas fields in the Gulf of Mexico. W&T holds working interests in approximately 54 offshore fields in federal and state waters. W&T has reserves of 76.4 million barrels of oil equivalent.

For the year, W&T Offshore, Inc. (NYSE:WTI) was downgraded by three firms in 2016. WTI performance lags behind oil exploration and drilling ETFs such as $XOP and $IEO. $WTI is up 12%, while XOP is up 44%, and $IEO has gained 30%. It should be noted that the constituents in these ETFs are larger and have access to more favorable financing in an industry that relies heavily on its ability to manage cashflows against volatile pricing.

3/2/2017
Ticker Symbol WTI
Last Price a/o 1:15 PM EST  $                      3.01
Average Volume                2,320,000
Market Cap (mlns)  $                  367.51
Sales (mlns) $388.80
Shares Outstanding (mlns) 140.27
Share Float (mlns) 91.79
Shortable Yes
Optionable Yes
Inside Ownership 32.90%
Short Float 10.17%
Short Interest Ratio 4.02
Quarterly Return 63.75%
YTD Return -5.42%
Year Return 20.74%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

Seadrill LLC (NYSE:SDLP) Prospects Looking Dim

Seadrill LLC (NYSE:SDLP)

Seadrill LLC (NYSE:SDLP) might be filing for bankruptcy. Seadrill is a UK-based limited liability company formed by Seadrill Limited (NYSE:SDRL) to own, operate and acquire offshore drilling rigs. The company’s drilling rigs are under long-term contracts with major oil companies such as Chevron, Total, BP and ExxonMobil. Yearly performance looks good – up 47%. However that number needs to be put in the context that the previous year was when SDLP shares were hitting all-time lows. When the downturn in the -off-shore drilling sector began in 2014, SDLP was trading above $20.

Wall St. analysts projected Seadrill LLC (NYSE:SDLP) Q4 revenues at $353 million – actual was $353.3 million. It is a small win for the company but that figure still represents a 24% YoY drop. Operating income dropped about 20% from the previous quarter and operating expenses increased around 3% from the prior quarter. However deeper in their earnings announcement was what cause SDLP shares to plummet:

The short to medium term outlook for the offshore drilling market continues to be challenging… We continue to expect utilization to get worse before it gets better as more units become available than are required… Discussions continue with stakeholders and potential new money investors, however given the status of those discussions, Seadrill Limited has indicated that it will be challenging to finalize a fully consensual agreement before April 30, 2017. In the event a consensual restructuring agreement is not concluded or an agreement to an extension is not reached, Seadrill Limited is also preparing various contingency plans, including potential schemes of arrangement or chapter 11 proceedings.”

On the release of this ominous press release, Seadrill LLC (NYSE:SDLP) shares dropped over 20%. Given the political landscape and the expectation that barriers to oil drilling will be dropping off faster than they were enacted, it is not unrealistic to believe that energy prices will remain flat or lower. Seadrill LLC (NYSE:SDLP) would, in that case, probably need to review alternatives.

3/1/2017
Ticker Symbol SDLP
Last Price a/o 4:44 PM EST  $                      3.62
Average Volume                    807,630
Market Cap (mlns)  $                  329.06
Sales (mlns) $1,710.00
Shares Outstanding (mlns) 90.9
Share Float (mlns) 49
Shortable Yes
Optionable Yes
Inside Ownership 0.00%
Short Float 1.40%
Short Interest Ratio 0.85
Quarterly Return 9.02%
YTD Return -11.74%
Year Return 46.84%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.