Hi Paul - I am getting bullish on deep sea drilling rigs and the cash flows these rigs can generate when out on lease.
It looks like you discovered a good one in SeaDrill (SDRLF.PK). (http://siliconinvestor.com/readmsg.aspx?msgid=23841846)
Here is a recent article I discovered in my research on this sector.
Deep Sea Drilling: A Risk Worth Taking?
posted on: May 03, 2007 | about stocks: GSF / NBL / PDE / SDRLF.PK
seekingalpha.com
From the article:"...As long as the rigs are in demand and users are willing to sign five year contracts that don't even start for several years, it's certainly worth it to buy one for over $500 million, even if you won't see it hit the water until mid-2010. Phew. Crazy business, but it is one with massive cash flows, and if SeaDrill continues along this track without major acquisitions I'd expect it to begin paying a significant dividend of those cash flows to shareholders within the next couple years, just as Fredriksen did with his Frontline tanker business (perhaps in part by selling the rigs off to Ship Finance, which is also riding high, and getting relatively generous lease-back deals). It should be a very interesting company and space to watch, at least over the next three years...."
I have SDRLF.PK on my watch list.
I was pleasantly surprised to see DryShips (Drys) take a 30.4% interest in the Norwegian offshore drilling contractor Ocean Rig ASA.
DryShips Dives Into Offshore Drilling
forbes.com
National Oilwell Varco, Incorporated (NOV) is another one that seems to be a play in the sector but it already has had a big run YTD and it seems to be a bit overvalued to me at this point.
Any opinion on NOV?
National Oilwell Varco, Inc. engages in the design, construction, manufacture, and sale of systems, components, and products to the oil and gas industry worldwide. It operates in three segments: Rig Technology, Petroleum Services & Supplies, and Distribution Services.
finance.yahoo.com
EKS |
