Offshore drillers float higher, at least for a day


Shares of offshore drillers are floating higher as Morgan Stanley’s team returns from a visit to Norway having seen increased signs of demand returning, with the newest most efficient rigs favored.

Stanley views Seadrill (SDRL +0.2%) as the best way to play an improving rig market, as it expects to lock up 2014-15 availability relatively soon, which should again tighten up the dividend and financing debate and result in a tightening of the yield.

Noble Corp. (NE +1%) is higher even as Susquehanna cuts its estimates following last week's fleet status update, noting that newbuild jackup Tom Prosser was contracted at a $203K dayrate, and the contract on the Paul Romano was cut from two years to six months, causing a $223M reduction in contracted revenue for 2015-16.

RDC +1.8%, ATW +1.5%, RIG +0.7%, DO +0.2%, ESV +0.1%.

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Comments (16)
  • James_B
    , contributor
    Comments (227) | Send Message
     
    That didn't take very long. SDRL to $50 by EOY?
    9 Jun 2014, 03:24 PM Reply Like
  • rickknott
    , contributor
    Comments (72) | Send Message
     
    Is the shorter contact duration for NE's Paul Romano really a $223M reduction in contract revenue for 2015-16? Or, does it position NE to renegotiate the contract at a higher day rate than what they would have received in revenue for the 18 months of 2015-16? Instead of starting the contract in early August 2014, they are now starting it in early June 2014. By early December 2014 when the 6 month contract for this one (of two semi-subs) in Malta is up for renewal, a new contract will certainly be possible. With any improvement in contract duration and day rate metrics, over the 18 months during 2015 and 2016, revenues will be better than what the market dictates today. Is the glass half full, or half empty?
    9 Jun 2014, 03:57 PM Reply Like
  • long_on_oil
    , contributor
    Comments (1357) | Send Message
     
    This would be great if it weren't so sad. These big boys flushed out the little guys for no reason at all. How long did the so called "big decline" in off shore drilling last? 6 months of declines in the sector for one reason only and that was to knock the sector down so the big boys could load up.
    Where is the great income equalizer President when we need him?
    The government needs to come down hard on this kind of crap these big houses are pulling. They would rather investigate Phil Michelson instead.
    9 Jun 2014, 04:08 PM Reply Like
  • CMPMD
    , contributor
    Comments (375) | Send Message
     
    Speaking of "sad"...
    9 Jun 2014, 06:03 PM Reply Like
  • Husker Bob
    , contributor
    Comments (1382) | Send Message
     
    Not sad for me. This little guy saw opportunity and grabbed it.

     

    Recently long SDRL and NADL and up quite nicely.
    9 Jun 2014, 06:40 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3509) | Send Message
     
    "Not sad for me."

     

    Not this time, you mean? Sooner or later one of their manipulative moves will get you. You should be against it on principle, even if it does impact whether you can get as good of an entry point.

     

    Technically the circuit breakers that they added to the market negatively affect whether you can get a better entry point, but I'm still happy they're there. ;)

     

    -Mike
    16 Jun 2014, 01:55 AM Reply Like
  • AmericaStartsHere
    , contributor
    Comments (46) | Send Message
     
    Do your due diligence and hold long and strong. No sympathy for those who panic and sell. Buy and hold. It's a simple strategy that works. Only way to beat the big boys.
    9 Jun 2014, 05:47 PM Reply Like
  • edgaraguzman
    , contributor
    Comments (10) | Send Message
     
    AmericaStartsHere you are right to hold the line - all else get tossed to and fro by the winds of the wave makers ... they need to go buy wood
    10 Jun 2014, 11:07 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    Where is P I ?
    9 Jun 2014, 06:31 PM Reply Like
  • bleweagle
    , contributor
    Comments (38) | Send Message
     
    Must be Phillipine Islands
    10 Jun 2014, 07:27 PM Reply Like
  • bleweagle
    , contributor
    Comments (38) | Send Message
     
    I own SDRl, It's looks good, and should be good for awhile... Dividend is great also.
    9 Jun 2014, 08:02 PM Reply Like
  • Debutant
    , contributor
    Comments (2777) | Send Message
     
    They had to go to Norway to see what I (together with a number of well-informed investors/commentators here on SA) have been seeing without leaving home: "......increased signs of demand returning, with the newest most efficient rigs favored".
    10 Jun 2014, 06:55 AM Reply Like
  • long_on_oil
    , contributor
    Comments (1357) | Send Message
     
    LOL do you really think they visited Norway or was it a conference call.
    10 Jun 2014, 09:00 AM Reply Like
  • Debutant
    , contributor
    Comments (2777) | Send Message
     
    English is not my first language. The words in the opening paragraph"....MS's team returns from a visit to Norway......" made me think that they have been to Norway [x].
    By the way, why not travel to Norway (or anywhere) as long as all expenses are paid by MS?:

     

    [x] : "Shares of offshore drillers are floating higher as Morgan Stanley’s team returns from a visit to Norway having seen increased signs of demand returning, with the newest most efficient rigs favored"
    10 Jun 2014, 09:56 AM Reply Like
  • combatcorpsmanVN
    , contributor
    Comments (1284) | Send Message
     
    $RIG - now that there is concern about IRAQ's ability to continue delivering 3,000,000 bbls a day to the Oil market, off-shore drillers stand to gain imo. At the moment, 9m barrels/day are being produced in the USA. Very little, if any, significant amount is being exported from the USA. RIG, ESV and other off-shore drillers are selling under book value at current share prices.

     

    IMO that's a recipe for increasing share prices.
    13 Jun 2014, 05:52 PM Reply Like
  • NV_GARY
    , contributor
    Comments (6162) | Send Message
     
    dated Jun 9th ?? huh?
    15 Jun 2014, 09:40 PM Reply Like
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