This week oil driller Ensco plc (ESV) announced the acquisition of competitor Pride International (PDE) in a cash and stock deal valued at $7.3 billion. According to the deal, shareholders of Pride will receive a 0.4778 Ensco share and $15.60 in cash for each Pride share they own. This offer represents a 21% premium to Pride’s stock price as of Feb 4th.
From a Bloomberg article suggesting that this deal may spur more mergers in the industry:
Rowan Cos. (RDC), a Houston-based operator of shallow-water rigs, and DryShips Inc.’s (DRYS) Ocean Rig UDW (OTC:OCNRF) unit may be the next targets for drillers eager to expand fleets as the search for offshore oil and natural-gas fields intensifies, said Brian Uhlmer, an analyst at Global Hunter Securities LLC in Houston.
“This industry is fairly scattered and consolidating this and moving forward on a basis of strength rather than speculation is always a good thing,” said Esa Ikäheimonen, chief financial officer of Seadrill Ltd. today in a telephone interview. Seadrill, based in Bermuda, hasn’t decided yet whether to shed its 9.4 percent stake in Pride and use the cash to pursue other targets, said Ikäheimonen.
Companies in this industry offer their highly-specialized technical expertise to the major oil firms. The success of the oil giants depends on smaller companies like the oil-drillers and other service providers. So investors looking to research into companies in the oil drilling industry may want to start with the world’s top companies noted below:
|2010 Rank||Company Name||Ticker||Market Cap ( in US $ billions) as of 12/31/2010||Country|
|7||China Oilf ield Services||OTCPK:CHOLY||14.8||China|
|14||Helmerich & Payne||HP||5.1||USA|
Source: PFC Energy
Disclosure: No positions