In the final quarter of 2007, offshore driller Pride International
The good news is that Pride keeps on signing sweet contracts for its fleet. Just recently, the firm locked down a five-year commitment from BP
Also sensible are Pride's sales of noncore assets, such as the tender rigs recently sold to a Norwegian investment group for $213 million. What bothers me is the suboptimal deployment of today's fleet.
In the fourth quarter, overall utilization was 72%. Deepwater and international jackup rigs were generally kept busy, but midwater and domestic jackup rig utilization was abysmal, at 59% and 58%, respectively. There is just a whole lot of upgrade and repair activity going on. A glance at Pride's fleet status report shows 2008 to be shipyard-heavy as well. ENSCO International
Pride's margins are slowly improving, but they're still soggy. The firm's total offshore drilling services EBITDA margin, which excludes noncash charges, clocked in at 53%. That beats both last quarter and the year-ago quarter, so the directionality is there, but there's a big chasm between Pride's margins and those of Noble
It's no wonder that Pride has been a constant object of takeover rumors. It would be a marvel to behold these rigs operating in more capable hands.