- Deutsche Bank analyst Mike Urban is negative on the offshore drilling sector and particularly on Hercules Offshore, but he likes Seadrill (SDRL +1.6%) well enough to offer some praise while maintaining his Hold rating.
- SDRL’s strong contract coverage and high-quality fleet leave the company relatively well positioned amid a likely long downturn, Urban says, and he views the announced deferral of jackup newbuild deliveries as a positive given his expectation that the shallow water market is on the cusp of a sharp decline.
- SDRL has a best in class fleet and is making the right moves for the long term, Urban says but warns that nothing is guaranteed in this market, fully expecting rigs to go idle.