This Week in Energy: Seadrill Ltd, Whiting Petroleum, and More

Seadrill Ltd (NYSE:SDRL) jumped by over 8% this week mainly due to Tuesday’s news that John Fredriksen, the offshore driller’s billionaire chairman, is said to be amenable to loan the company as much as $1.2 billion (in debt) as part of a larger deal with several financial institutions to restructure the offshore driller’s considerable debt burden. The potential restructuring could postpone Seadrill’s considerable maturities until 2020 or later and buy more time for both the company and its creditors to await a recovery in oil prices and offshore drilling activity. After surging sharply on the back of the news news and a temporary short squeeze, shares of Seadrill have settled back into a narrowing range as the stock consolidates. A total of 17 funds from our database were long Seadrill Ltd (NYSE:SDRL) at the end of June, down by five funds from the previous quarter.

After lagging behind its peers due to a $1.06 billion exchange of debt for mandatory convertible notes that may or may not be over (we’re not sure because the company hasn’t disclosed anything publicly about it this week), Whiting Petroleum Corp (NYSE:WLL) shareholders are happy after the stock showed some relative strength and breached the $8.75 to $9 per share resistance that many thought would last longer. It isn’t a secret that Whiting’s performance has lagged many of its peers in the Bakken and among other shale drillers. It also isn’t a secret that Whiting’s break-even is around $50-$55 per barrel, which is almost exactly where WTI is. Although the mandatory convertible muddies the water in the near term, Whiting has a bright future in the long term if crude can rally and stay above $50-$55 per barrel. Among the funds we track, 41 funds owned $493.73 million worth of Whiting Petroleum Corp (NYSE:WLL)’s stock, which accounted for 21.20% of the float on June 30, versus 43 funds and $303.58 million, respectively, on March 31.

Disclosure: None