Is It Time To Invest In Offshore Drillers?

[James Regan + 1,776]

Things have definitely picked up over the past few months without any help from the KSA disaster.

Seadrill SDRL- 3.1700-0.2100 (-6.21%) - Rigs currently being restarted in all regions- Nov 21 Earnings report due.

Transocean- RIG 6.02-0.49 (-7.53%) - Ocean Rig Merger Rigs currently prepping to leave Las Palmas- Oct 1 Earnings report due.

Pacific Drilling PACD - 5.65-0.51 (-8.28%) Just had a huge reshuffle and aim to make the company profitable. - Dec 6 2019 Earning reports due.

We are seeing a big demand in Engineering staff required to bring units out of warm or cold stacking, we are hopeful based on current numbers and projects worldwide.

These are penny stocks really, which have the potential to give a return- Long Term.

https://oilprice.com/Energy/Energy-General/Is-It-Time-To-Invest-In-Offshore-Drillers.html

[Douglas Buckland + 6,308]

I haven’t seen alot of activity on the job sites re starting the deepwater rigs up. Where are you getting that? Wouldn’t a better metric be contracts awarded?

I tend to think you’ll see dirt rigs and jackups firing up before the deepwater semis or drillships simply due to the costs/rates/stagnant oil price.

[James Regan + 1,776]

46 minutes ago, Douglas Buckland said:

I haven’t seen alot of activity on the job sites re starting the deepwater rigs up. Where are you getting that? Wouldn’t a better metric be contracts awarded?

I tend to think you’ll see dirt rigs and jackups firing up before the deepwater semis or drillships simply due to the costs/rates/stagnant oil price.

Doug, as we are involved in pre contract preparations and evaluation of the units pre bid, we are seeing much more activity, which points to future contracts being awarded.

There will be a market for Jack ups and shallow water semis also for abandonment work, especially here in Brasil.

Edited September 18, 2019 by James Regan

[Rasmus Jorgensen + 1,169]

5 hours ago, James Regan said:

Doug, as we are involved in pre contract preparations and evaluation of the units pre bid, we are seeing much more activity, which points to future contracts being awarded.

There will be a market for Jack ups and shallow water semis also for abandonment work, especially here in Brasil.

 

6 hours ago, James Regan said:

Things have definitely picked up over the past few months without any help from the KSA disaster.

Seadrill SDRL- 3.1700-0.2100 (-6.21%) - Rigs currently being restarted in all regions- Nov 21 Earnings report due.

Transocean- RIG 6.02-0.49 (-7.53%) - Ocean Rig Merger Rigs currently prepping to leave Las Palmas- Oct 1 Earnings report due.

Pacific Drilling PACD - 5.65-0.51 (-8.28%) Just had a huge reshuffle and aim to make the company profitable. - Dec 6 2019 Earning reports due.

We are seeing a big demand in Engineering staff required to bring units out of warm or cold stacking, we are hopeful based on current numbers and projects worldwide.

These are penny stocks really, which have the potential to give a return- Long Term.

https://oilprice.com/Energy/Energy-General/Is-It-Time-To-Invest-In-Offshore-Drillers.html

I hope you are rigth; I want to believe you are right. But I can't get it to add up. 

Back in 2013 Brasil had something like 50 floaters and sete Brasil was gonna add 20-something. How many are there today? 20? How many are there going to be in 5 years? 

The offshore supply chain had too much capacity already in 2013.. 

Scrapping, mergers, consolidation is needed. SDRL and Transocean may be winners, but as I see it current acitivity increase is not enough to make them winners. More tough times ahead; not sure we have seen the last re-structuring. 

[James Regan + 1,776]

21 minutes ago, Rasmus Jorgensen said:

 

I hope you are rigth; I want to believe you are right. But I can't get it to add up. 

Back in 2013 Brasil had something like 50 floaters and sete Brasil was gonna add 20-something. How many are there today? 20? How many are there going to be in 5 years? 

The offshore supply chain had too much capacity already in 2013.. 

Scrapping, mergers, consolidation is needed. SDRL and Transocean may be winners, but as I see it current acitivity increase is not enough to make them winners. More tough times ahead; not sure we have seen the last re-structuring. 

Up to 23 DS and SS, more on the way, rigs are still being built for Brasil 2020/21- We are seeing growth.

They will be sorry in the end that they scrapped so many newer units.

Problem here is the rigs come in fully ladened with spares and capital equipment, while intake no taxes, if the unit loses its contract its too expensive to stack and badly positioned, so for the rig to leaves for another region they need to pay all the taxes on the spare parts, so they sell all the new gear, anything thats not nailed down for scrap, the rig leaves bare bones and loses any marketable value due to massive start up costs replacing spares and capital spares.

Hence Brasilian companies have the biggest share of the drilling pie, and contracts awarded to local companies, not all but a large percentage.

It will change as Castelo Branco continues his work.

Edited September 18, 2019 by James Regan