It seems like Ensco is priced for the mid-term, one to two, maybeee three years. I've done my own analysis and tried to confirm it with seekingalpha but I value your opinions more highly than those on SA. The oil industry is somewhat volatile, but I have little doubt oil prices will come back and ESV is, I think, well-positioned for that. They also seem to be making all the right moves to accommodate the drop in demand, although an 80% dividend cut was perhaps a bit drastic... Thoughts?
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Offshore drilling market is hosed. Supply problem with almost negative demand as e&ps cancel contacts. Relatively strong balance sheet but robust organic growth pipeline limits incremental m&a. Good house in an awful neighborhood
Yep, it's currently a terrible market for offshore drillers. Currently. Really my question is - oil prices almost have to rebound, right? Within 3-5 years, worst case? What's going to replace oil in the next 10 years? 20 even? And once oil prices improve, offshore driller prices will improve.
Still the issue of oversupply of rigs, but I think most companies will have to retire some rigs so that's also a relatively short-term (within 3 years) issue.
Am I just totally missing something? Are supercapacitors that can power cars for 500 miles primed to come to market in 6 months or something?
Oil prices will rebound which will affect drilling stocks but us prodn is moving even further down the price curve given service cost reductions. In regards to rig retirements even if you retire every single 25 or even 20 y.o. rig that's uncontracted you would have sub 70%utilization on an unconnected rig for the next couple of years. That will make it tough on everyone even esv. there are much better ways to play an oil price recovery.
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