Why We’re Still Bearish on Offshore Contract Drillers
Weak demand, a wave of contract expirations and excessive leverage are all reasons to remain bearish on offshore contract drillers. Investors should continue to avoid these value traps.
Oil-Field Services and Equipment: Exercise Caution
Despite the recent rally in shares of oil-field service providers, our negative outlook for activity levels in the international market and skepticism regarding the timing and magnitude of a recovery in North America explains why we remain underweight oil-field services and capital equipment. Many of these stocks have rallied too far, too fast and don’t account for overcapacity that remains to be worked off from the boom years.
Key Takeaways from Schlumberger’s Fourth-Quarter Earnings Call
In these uncertain times, Schlumberger’s quarterly conference calls are must-attend events; here are our key takeaways from the last week’s call, our updated thoughts on the oil-field services company as an investment and read-throughs for other energy companies.
Warren Buffett’s Biggest Mistake: A Warning for “Value” Investors
Warren Buffett’s biggest investment mistake holds an important lesson for investors eyeing value opportunities in the energy sector.
The Oil Down-Cycle: Lessons from the Past
US oil prices would need to overshoot the levels supported by prevailing supply and demand conditions to prompt producers to idle rigs and reduce capital expenditures dramatically. Weak balance sheets and higher-cost asset bases will compel some operators to scale back.
This supply response in the US and elsewhere will signal that we’re near the bottom of the commodity cycle. The question investors must ask isn’t whether this will happen, but rather how long this process will take to occur.
IPO Analysis: Ocean Rig Partners LP (NSDQ: ORLP)
Offshore contract driller Ocean Rig UDW has followed SeaDrill and Transocean’s lead and filed an initial registration statement for a master limited partnership that will own rigs that operate under longer-term contracts. We do a deep dive to determine whether Ocean Rig Partners LP is worth your while.
New MLPs on the Seas
The latest batch of master limited partnerships to complete their initial public offerings include two names that specialize in marine assets: Transocean Partners LLC and Hoegh LNG Partners LP.
Five Myths about SeaDrill That Could Cost You Real Money
SeaDrill has given up 36 percent of its value since the start of September, yet some uninformed market pundits continue to pound the table for the stock. These five myths about SeaDrill could cost you real money.
Offshore Contract Drillers: Lessons from the Tanker Industry
The most recent boom and bust cycle in the tanker market provides useful insight into the deteriorating fundamentals in the offshore drilling market.
Profiting from SeaDrill’s Pain
Whereas SeaDrill’s stock has tumbled by 15.2 percent over the past year, SeaDrill Partners’ units have delivered a total return of 15.6 percent.
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Elliott and Roger on May. 28, 2020
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Experts
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor