Offshore drilling contractor Ocean Rig UDW Inc. ORIG declared the pricing of 28,571,428 common shares. The stock offering is anticipated to close on Jun 8, 2015.
Ocean Rig has priced the stock at $7.00 per share. It is to be noted that George Economou − Chairman, President and Chief Executive Officer of the company – will buy 1,428,571 common shares, albeit at the price offered to the general public.
The company added that net proceeds from the stock offering will likely be utilized for funding working capital as well as general corporate needs and also for purchasing drilling rigs.
Last month, Ocean Rig declared first-quarter 2015 results. The company reported earnings per share of 31 cents against the Zacks Consensus Estimate of loss of 5 cents and the year-ago quarter loss of 1 cent. Record utilization of rigs supported the huge improvement.
Ocean Rig primarily provides oil field services to upstream players engaged in offshore oil & natural gas exploration and production activities. The company specializes in drilling in harsh environments and ultra deep waters. Presently, the firm operates 13 offshore ultra deepwater drilling rigs. Of these, 2 drilling units are ultra deepwater semisubmersibles, while 11 are ultra deepwater drillships.
Although the oil pricing environment is not favorable, we believe the company’s fundamentals stand strong. As of May 4, 2015, Ocean Rig’s total backlog marked a record high of $4.7 billion.
The company currently carries a Zacks Rank #2 (Buy), which implies the stock will outperform the broader U.S. equity market over the next one to three months.
One could also consider players in the energy sector like Pembina Pipeline Corporation PBA, LRR Energy LP LRE and WPX Energy Inc. WPX. All these stocks sport a Zacks Rank #1 (Strong Buy).
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