Oil and natural gas driller, Ensco plc ESV announced the expiration of its cash tender offer to purchase any and all of its outstanding 3.25% Senior Notes due 2016. The offer was made on Mar 4 for the principal amount of the notes outstanding aggregating approximately $1.0 billion.
At the time of expiration, holders had validly tendered and not validly withdrawn in the tender offer of $853,050,000 aggregate principal amount of the notes, representing approximately 85.3% of the outstanding aggregate principal amount of the notes.
Following the closing of the contemporaneous notes offering, Ensco intends to exercise its right to redeem any note not purchased in the tender offer that remains outstanding pursuant to the indenture governing it.
At the end of the fourth quarter, Ensco had $664.8 million in cash and cash equivalents. Long-term debt (including current maturities) was $5,885.6 million, with debt-to-capitalization ratio coming in at 42%.
The ongoing weakness in oil prices continues to overshadow the performance of the offshore drilling fraternity that is already facing a bleak industry outlook.
As the commodity hovers around the $50-a-barrel level, the top energy companies continue to cut spending (particularly on the costly deepwater drilling projects) on the back of lower profit margins. This, in turn, means less work for the beleaguered drillers that are facing an uphill battle to turn around.
Ensco is a leading supplier of offshore contract drilling services to the oil and gas industry.
Ensco currently carries a Zacks Rank #4 (Sell). Better-ranked oil and gas sector stocks include Valero Energy Partners L.P. VLP, Global Partners LP GLP and Hallador Energy Company HNRG. All these carry a Zacks Rank #1 (Strong Buy).
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