Paragon Offshore's Norwegian Buy Doesn't Move Market
Paragon Offshore plc's (NYSE: PGN) plan to acquire Oslo-listed Prospector Offshore Drilling S.A was having little effect on the long-suffering oilfield services sector Monday.
Paragon, a Houston-based provider of offshore rigs, gained more than 6 percent $5.08 on Monday.
Prospector jumped more than 48 percent on the Oslo Axess Exchange under the ticker symbol PROS.
But other companies in the offshore drilling services sector appeared unmoved by the news.
The exchange-traded fund Market Vectors Oil Services (NYSE: OIH) was nearly unchanged Monday and is down more than 60 percent year to date.
The sector is under pressure from falling oil prices and the growing field of hydraulic fracturing which provides service companies with lower profit margins.
Paragon, spun off from privately held Noble Corporation plc in August, acquired a 55.8 percent stake in Oslo-listed Prospector Offshore Drilling S.A. Monday, and will launch a tender offer for the remaining shares of Prospector within four weeks.
So far, Paragon has paid $2.13 per share for 52.75 million Prospector shares.
Prospector owns and operates two North Sea rigs under contract to Total SA (NYSE: TOT), with backlog of $384 million. Prospector has three more rigs under construction.
Paragon last week posted a third-quarter net loss of $894 million, or $10.14, vs. year-earlier net income of $158 million, or $1.80. Adjusted profits for the recent period equaled $0.59 per share.
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