Oil and natural gas driller, Ensco plc ESV announced that Carey Lowe has been named chief operating officer (COO) of the company. Lowe will replace Mark Burns, who is retiring from the company, with immediate effect and will be based in London. Lowe joined Ensco in 2008 and has held various executive management positions in operations, engineering, safety and strategy.
Ensco − a leading supplier of offshore contract drilling services to the oil and gas industry − remains well positioned to improve its earnings and revenues in the foreseeable future. It is also likely to benefit from any recovery in oil-directed drilling.
Having transformed from a Gulf of Mexico (GoM) company to a relatively pure international play, Ensco should be well positioned to improve its earnings and revenues in the foreseeable future, as well as benefit from a recovery in oil-directed drilling. However, the markets look weak for the near term.
At the end of the third quarter, Ensco had $240.4 million in cash and cash equivalents. Long-term debt (including current maturities) was $5,903.3 million, with debt-to-capitalization ratio of 39.6% (compared with 40.3% in the preceding quarter).
As crude continues to display bearish trends and revolves around the $39-a-barrel level, the top energy companies have resorted to spending cuts (particularly on the costly upstream projects) to tide over lower profit margins. This, in turn, means less work for drilling contractors like Ensco.
Ensco currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector are Energy Transfer Equity, L.P. ETE, ReneSola Ltd. SOL and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy) and would offer above-average returns to investors.
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