The only thing that has been steady about Transocean (RIG) over the last 18 months is the decline in its stock price. Transocean has fallen 70% over that period, in step with crude oil's 70% decline.
Shortly after 2 p.m. ET today, Transocean's stock was down nearly 10%, to $8.60, which is below the stock's 12-month consensus price target of $10.45.
RIG's stock took a hit on Monday after the Swiss offshore drilling company announced that a Murphy Oil Corp. (MUR) subsidiary terminated the contract for the ultra-deepwater drillship Discoverer Deep Seas early. The contract originally was supposed to expire in November.
"With no contract on the horizon, there is an increased likelihood that the rig is cold-stacked, which in turn increases the likelihood that it never returns to service," analysts at Citgroup said.
As falling crude prices make exploring for and producing the commodity less profitable, oil companies across the board have been slashing their capital expenditure budgets for months. Royal Dutch Shell (RDS.A) and Statoil (STO) terminated their contracts with Transocean in December due to market conditions.
In the first half of January, short interest in Transocean rose 8.7%
Transocean's cash assets declined to $28.4 billion in 2014 from $34.2 billion in 2012. However, the company also has been active in limiting its liability over the same period, reducing its total liabilities to $14.4 billion from $18.5 billion.
Today, West Texas Intermediate crude prices fell below $29 a barrel as the commodity slides for the fourth consecutive session. Industry standard Brent crude still is hovering above $31 per barrel, but has fallen $1.86 in trading today.
Separately, TheStreet Ratings has a Sell rating on the company with a D+. TheStreet identified several weaknesses with the company, including the stock's recent decline and weak operating cash flow.
Transocean is scheduled to release its latest quarterly results in two weeks on Feb. 24. Analysts on average are expecting the company to report earnings of $0.28 per share, well below the $0.87 per share the company earned in the previous quarter.
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