freefall51

These Three Deep Sea Drillers Look Like a Bargain

What I like about these drillers is that the dayrates of today have been negotiated a few years ago, when oil was was what ... $ 40 - 60/ barrel? Since a certain portion of the service contracts say 20 % are renegotiated every year they still have a lot to catch up to todays oil prices. I like in particular that RIG has the biggest asset base after they merged with GFS. Inflationary steel and other prices will push the prices for new rigs up and will define the re-negotiated dayrates in the future. I assume this will in a way lift the price level of the whole existing fleet.

I believe the US outer shelf will be opened for drilling, since the public pressure on the politicians will be untenable over time not to. I that happens the guys that have the drilling rigs in place will be in the driver seat.

If I were to hire a company for a deep sea drilling project that would cost me a couple of hundred million dollars for a hit or miss I would go with the best in class.

Bigger is apparently better. It was recently announced that RIG holds the standing record for deep drilling ~ 40,000 ft down. RIG is the biggest animal in that market and they are performing.