In its latest fleet status update, deepwater titan
Transocean (NYSE: RIG) revealed some more rot
in the shallow end of the drilling pool.
The firm has stacked (i.e., de-crewed and stopped actively
marketing) four more jackup rigs. Two are standard jackups
now sitting in Malaysia, the
GSF Adriatic XIand the
GSF Rig 136. It's interesting that both went from
contract work to stacked, with no idle time in between.
The other two stacked jackups are so-called
"high-specification" rigs -- meaning they have all the bells
and whistles an operator could wish for. The
GSF Galaxy Ihad been working for
BP (NYSE: BP) in the UK North Sea for the
past year or so. The
GSF Galaxy II, also serving the UK market, has been
idle for months. I told you this was shaping up to be another
dead sea.
The weakness evident in shallow water markets not only in
the Gulf of Mexico, but around the world, reaffirms my belief
that drillers like
Hercules Offshore (Nasdaq: HERO) and
Seahawk Drilling (Nasdaq: HAWK) are to be
avoided.
Of course, the shaky demand doesn't end there. Also
reported in Transocean's update was the stacking of a few
midwater floaters. This is the next step up the totem pole in
terms of water depth (1,000 to 4,000 feet) and drilling
complexity.
The
Sedco 700had been plugging away for
Total SA (NYSE: TOT) at a rate north of
$400,000 per day. Now? Zippo. The
GSF Arctic IIIhas also been left out in the cold
after doing a stint for
Eni (NYSE: E) in Libya.
Pride International (NYSE: PDE) now sports
some idle rigs in this category as well.
The market for contract drilling now looks more bifurcated
than ever. For my recent peek at deepwater demand, which
continues to look robust, click on over
here. And if you disagree with my assessment or think
I've missed anything, drop me a line in the comment section
below.
This article was originally published as
Steer Clear of These Offshore Drillerson
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