Thanks. IMO rating agencies are mostly backward looking, meaning I wouldn't place much weight in their up-/downgrades for investment decisions. Day-rates need to keep resetting higher, otherwise RIG might have a problem. Not necessarily near term, but down the line. I own some DO as well, but prefer ODL and RIG.
Thanks for all of these analyses. Helpful for a generalist such as myself.
Have you given any thought to how the offshore contractors' capital structure would be affected by accident? Transocean was of course involved in the Macondo event. (Don't recall seeing this mentioned here, but please excuse if I missed something.)
Also, to what extent do you think the fact that predecessors to Valaris went through bankruptcy affect any material driver of their businesses?
PS, commenting here rather than on Part III due to what appears to be a bug with Substack (requiring "paid subscription," which I couldn't find for your publication)
Black-swan type events like Macondo oil spill would defo change things. Find them tough to incorporate into analysis other than by increasing risk premium on these assets. That said, I don't think that kind of risk is exclusive to offshore drillers (O&G more broadly, chemicals, nuclear, tobacco ... essentially most non-ESG).
Good report. It is very interesting. I agree with you.
Even if it comes in the next post, you could briefly say how you assess Transocean financially. Downgrade by S&P to CCC-. Does not sounds good.
Diamond Offshore is my favorite. Short term not the greatest potential. Long term more. Is the cheapest valuation and has little debt.
I am long Diamond Offshore, Transcoean and Noble.
Thanks. IMO rating agencies are mostly backward looking, meaning I wouldn't place much weight in their up-/downgrades for investment decisions. Day-rates need to keep resetting higher, otherwise RIG might have a problem. Not necessarily near term, but down the line. I own some DO as well, but prefer ODL and RIG.
Thank you. Waiting already interested in part III
Thanks for all of these analyses. Helpful for a generalist such as myself.
Have you given any thought to how the offshore contractors' capital structure would be affected by accident? Transocean was of course involved in the Macondo event. (Don't recall seeing this mentioned here, but please excuse if I missed something.)
Also, to what extent do you think the fact that predecessors to Valaris went through bankruptcy affect any material driver of their businesses?
PS, commenting here rather than on Part III due to what appears to be a bug with Substack (requiring "paid subscription," which I couldn't find for your publication)
Black-swan type events like Macondo oil spill would defo change things. Find them tough to incorporate into analysis other than by increasing risk premium on these assets. That said, I don't think that kind of risk is exclusive to offshore drillers (O&G more broadly, chemicals, nuclear, tobacco ... essentially most non-ESG).