Investing to Wealth

Seahawk Drilling Inc. (NASDAQ: HAWK)

Seahawk Drilling Inc. (HAWK) operates independently of Pride International Inc. as of August 24, 2009. HAWK owns and operates 20 jackups located in the United States and Mexico. The Company provides contract drilling services to the oil and natural gas exploration industry in water depths of up to 300 feet and drilling depths of up to 25,000 feet.

The Company was incorporated in 2008 and is based in Houston, Texas.

Source: Reuters.com, SEC Filings.

Financial Summary

HAWK reported a loss of $32.4 million, or $2.79 per diluted share for the three months ended September 30, 2009, including the results from the discontinued operations platform business, which was sold in May of 2008. Continuing operations for the three months ended September 30, 2009, excluding the platform business, reported a loss of $32.5 million, or $2.80 per diluted share, compared to $41.8 million, or $3.61 per diluted share for the three months ended September 30, 2008.

The results of continuing operations for the third quarter included a number of non-recurring charges and other items associated with the recent spin-off from Pride International Inc. totaling $39.6 million, or $25.7 million after tax, and $2.22 per diluted share. Income from continuing operations adjusted for non-recurring charges represented a loss of $6.7 million, or $0.58 per diluted share. Revenues totaled $67.6 million during the three months ended September 30, 2009, compared with $164.0 million during the three months ended September 30, 2008.

For the nine months ended September 30, 2009, HAWK incurred a loss of $25.1 million, or $2.17 per diluted share, which includes the result of the discontinued operations of the platform business. The loss from continuing operations for the nine months ended September 30, 2009, was $28.2 million, or $2.44 per diluted share, compared to the prior year, excluding the discontinued operations of the platform business, income for the nine months ended September 30, 2008, was $135.1 million, or $11.66 per diluted share. Revenues for the nine months ended September 30, 2009, totaled $259.8 million compared to $529.6 million during the nine months ended September 30, 2008.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among three polled investment analysts. Against the Seahawk Drilling Inc. company.

The three analysts offering 12-month price targets for HAWK have a median target of 88.00, with a high estimate of 225.00 and a low estimate of 88.00. The median estimate represents a 142.76% increase from the last price of 36.25.

Source: www.ft.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=HAWK.O

Investment Highlights

HAWK announced in late August the completion of its spin-off from Pride International Inc. (NYSE: PDE). The new company is comprised of 20 jackup rigs currently located offshore in the United States and Mexico. Shares of HAWK were electronically distributed today to Pride shareholders as of the record date August 14, 2009, in the ratio of 1 HAWK share per 15 Pride shares held, as previously announced by Pride on August 4, 2009. HAWK is now completely independent from Pride and began “regular-way” trading on NASDAQ on August 25, 2009, under the symbol “HAWK.”

In early September HAWK announced that William C. (Kurt) Hoffman has been appointed to the position of senior vice president and chief operating officer. Hoffman is a 27-year veteran of the oilfield services industry. Since 2004, Hoffman has been vice president Worldwide Marketing at Noble Corp. (NYSE:NE), a leading offshore drilling contractor, where he was also vice president Western Hemisphere Operations from 2000-2004. Prior to Noble, Hoffman held several management positions with Triton Engineering Services, including president, and vice president of International Operations. Hoffman started his career in the drilling industry with Zapata Offshore Company. While at Noble, Hoffman was instrumental in the development and implementation of a successful strategy to grow their business in Mexico, and has been a key element of Noble’s growth in both the United States and internationally over the past several years.

Source: http://www.seahawkdrilling.com/fw/main/Home-80.html

Technical Analysis

HAWK is substantially below its 50-day moving average. Although the moving average is still trending higher, it is likely that it will begin to follow the stock price lower.

HAWK is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.

The MACD for HAWK currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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