Lowering U.S. Land Drillers FVEs on Revised Rig Count Forecast; Companies Look Very Overvalued
We’re lowering our fair value estimates for U.S. land drillers, owing chiefly to a lowered midcycle forecast for the U.S. horizontal rig count (from about 800 previously to 700 now). Our Nabors fair value estimate moves to $6 per share from $6.50; that for Precision decreases to $2.25 from $3; that for Patterson to $13.25 from $13.50; and that for Helmerich & Payne to $40 from $41. Our no-moat ratings for these companies remain in place. Overall, U.S. land drillers look very overvalued, on a...Helmerich & Payne provides drilling services and technologies for oil and gas exploration and production companies. The company's contract drilling business segments are: United States Land, which operates in Colorado, Louisiana, Ohio, Oklahoma, Montana, New Mexico, North Dakota, Pennsylvania, Texas, Utah, West Virginia and Wyoming; Offshore, which operates in United States federal waters in the Gulf of Mexico; and International Land, which has rigs in Argentina, Bahrain, Colombia and United Arab Emirates. The company's drilling technology-based business segment, Helmerich & Payne Technologies, is focused on developing, promoting and commercializing technologies designed to improve the drilling operations.
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