JREwing

A Look at Earnings from Transocean and Devon

Yep.

A Look at Earnings from Transocean and Devon

Did you give any reason why crude oil is going to come down?

Like many people, when it comes to oil, you seem to be guided by wishful thinking.

May be there is something in the bible, about oil having to be for free.

Fact 1: Easy oil is gone. Supergiants like Cantarell or Ghawar are declining in daily production. Easy oil, because an idiot with a straw could suck oil out of those fields.

Fact 2: 30 Years of underinvestment in the oil industry. Fields, infrastructure, workforce are old. Exploration has been neglected.

Fact 3: Consumption per capita in India and China are only a fraction of the OECD countries. On top of that, petroleum products in the BRIC nations are subsidized, therefore no demand destruction.

Fact 4: All significant discoveries are made in deep or ultra deep water.

Fact 5: Every oil company in the world is hiking their E&P spending, even PEMEX drills in deepwater USGOM now.

Now, Thomas, why would oil demand come down?

Or let me put another way, when demand for oil comes down, I want to be short every stock there is, because then the world economy has got to be in a deep, deep toilet.

A Look at Earnings from Transocean and Devon

Good post Brian.

I really tried to understand the 'Sell' rating from Mike Urban. He means the risk in the Jack up market is to big. Wow, that is breaking news.

RIG showed, that they don't hesitate to sell off non performing assets. Bob Long clearly stated in the conference call, that the cash flow produced by the Jack up fleet is to significant to sell it.

I am glad to be the company of so many RIG fans.

A Look at Earnings from Transocean and Devon

Exactly, even yesterday with the downgrade, RIG was the money flow leader in buying on weakness.

A Look at Earnings from Transocean and Devon

Since all significant discoveries are made in deepwater or ultra-deepwater, i just can't get bearish on this RIG.

Sure they have cost increases, but they get great day rates across the board. Even in the jack up market. They have the biggest and most sophisticated deepwater fleet and they seem to execute well. I like the fact that they are not USGOM and Brazil centric. Also, they sold their shallow water USGOM business, because it has the weakest margin. Their business in India looks nice. Seem to be a lot of opportunities there.

I own RIG.