ESV Ensco Plc New

   By Tess Stynes 
 

Ensco PLC (ESV) said it is offering 50 million shares to raise funds for general corporate purposes, sending the British offshore drilling company's shares lower.

The company also projected a first-quarter revenue decline that wasn't as deep as analysts' feared. Ensco cited higher-than-anticipated utilization rates and a smaller-than-expected decline in average day rates.

Shares fell 5.6% to $10 in recent after-hours trading. Through Thursday's close, the stock has fallen 58% in the past 12 months.

Ensco didn't provide details about the pricing of the shares in its news release Thursday. The company had roughly 235.3 million shares outstanding as of Feb. 19, according to a regulatory filing.

Many energy companies have been tapping the stock market to raise funds to help repay debt and to keep drilling since oil and gas prices began tumbling in late 2014.

The further commodity prices and energy stocks slid, the more shares companies have had to sell at ever lower prices to raise the desired proceeds. This has further diluted the stakes held by existing shareholders, who are already have been hit by falling share prices.

In a regulatory filing Thursday, Ensco also projected first-quarter revenue of $812 million to $817 million, above estimates of analysts polled by Thomson Reuters for $793 million.

Ensco estimated its utilization rate for the quarter between 64% and 66%, compared with its previous guidance in the low 60% range. The company also expects to report average day rates declined by 3% to 4%, compared with its previous projection for a drop of 7% to 8%.

Ensco, already among energy companies with the biggest percentage cuts in its capital spending plans, further reduced its 2016 capital spending outlook by $50 million to $400 million. That compares with capital spending of $1.6 billion during 2015.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

April 14, 2016 17:42 ET (21:42 GMT)

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