Seeking Alpha

Noble Corp., Diamond Offshore shares down big on slower drilling outlook

  • Noble Corp. (NE -9.7%) leads a drop in deepwater drilling contractors after saying it is seeing fewer contract opportunities than a year ago and the industry may be experiencing a “pause in the cycle” after years of growth fueled by oil and natural gas discoveries.
  • The pace of customer spending growth is expected to be lower this year compared with last year, NE says in its earnings call, and that's with 38 ultra-deepwater rigs around the world looking for work vs. 22 a year ago.
  • The market for shallow-water rigs also looks wobbly, as Hercules Offshore (HERO -16.3%) said yesterday in a fleet status report that it suspended plans to reactivate a shallow-water rig in the Gulf of Mexico.
  • Also: DO -5.3%, ESV -4.8%, RDC -3.8%, ATW -3.9%, RIG -3.5%, SDRL -2.8%, HP -1.1%, VTG -4.3%, PKD -1.9%.
Comments (12)
  • chopchop0
    , contributor
    Comments (3107) | Send Message
    the oil boom in the US that doesn't require deepwater drilling can't be good for these guys. Glad I got out of NE near 40.


    Deepwater drilling is dead in the water as long as oil prices remain <$110.
    23 Jan, 03:24 PM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
    Oil boom? You mean that Fracking thing? I hope North Americans enjoy drinking poisoned water, 'cause that's what they'll be getting from Fracking. Hey, but as long as someone profits from it, who cares if people die? Right?
    24 Jan, 03:36 AM Reply Like
  • chopchop0
    , contributor
    Comments (3107) | Send Message
    So you're fine with drilling in the gulf and the perils that we've seen with that?
    24 Jan, 09:32 AM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
    That's not even comparable. Fracking is poisoning potable sources of water. I bet it will be a much worse problem than BP's spill.
    24 Jan, 10:05 AM Reply Like
  • jeezuz30
    , contributor
    Comments (286) | Send Message
    mitrado you should look up the facts before spreading propaganda


    fresh water sources are normally in the first 1000-2000 feet, which gets cased and cemented before any production begins.


    payzones are usually 5000-10000 feet below that ground, normally by that point the well has been cased and cemented at least twice


    this is were fracking takes place and a frack does not go much more than 300-500 feet
    27 Jan, 01:55 PM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
    Spreading propaganda? No, I am merely raising doubts that I hope to be cleared after environmental studies are completed.


    At the moment, all I see is some people complaining about their water wells becoming contaminated and the water completely ruined for human consumption. And I have no reason to accuse them of lying.
    But if that is only propaganda, maybe you'd like to give that water to all your family?


    If my suspicions are wrong, what harm does it do? None whatsoever! Maybe a few companies will not profit as much as they would like but that's about it.


    However, if you're wrong, what harm does it do? Sources of potable water will cease to exist, affecting a lot of farmers and families in the process.


    Is it really worth the risk to assume Fracking is 100% safe without enough evidence and without completed studies to prove it!? I think not. My motto is: better sorry than late.
    28 Jan, 03:20 AM Reply Like
  • sae20004
    , contributor
    Comments (4) | Send Message
    Some of the largest discoveries off the South American coast require deep water drilling. These companies were oversold today.
    24 Jan, 08:36 AM Reply Like
  • HeinekenPete
    , contributor
    Comments (3) | Send Message
    ...or you could invest in a company like Ecolab (ECL) that sees the opportunity in treating bi-products from fracking & drilling. They recently acquired two companies that specialize in this area. Bill Gates likes the Ecolab enough to own 10% of it. I bought back in April around $82, plan to add to my position, and hold it for the long term as the demand for these services are bound to grow.
    24 Jan, 12:29 PM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
    ECL seems interesting but I don't invest in companies with a 0.01% dividend yield (after taxes.) I'm not in the right country to invest in such companies, I'm afraid. Taxes are just too high here.
    24 Jan, 12:39 PM Reply Like
  • amkthetraveller
    , contributor
    Comments (5) | Send Message
    From previous articles in SA it would appear that 4 new rigs being build for ESV have already
    been contracted out for work in the North Sea, in which case the steady fall of the share price
    seems to be overdone.
    24 Jan, 12:30 PM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (2138) | Send Message
    Agreed. This co is solid and this stock is a bargain right now. I picked up more for a client yesterday @ $52.65, and I'll add more for him if it drops into the $40s.
    25 Jan, 01:40 AM Reply Like
  • PePere Daniel
    , contributor
    Comments (5) | Send Message
    I am buying SDRL Monday and / or Tuesday. As a dividend investor, I like the paramaters. Drilling ... even deep water drilling is here for a while. We still need energy. SDRL also seems to be pretty well booked on their rigs with a few coming up for contract in 2015. They are also still having new rigs constructed currently.
    26 Jan, 08:24 AM Reply Like
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