Ultra-deepwater drilling leaders Seadrill (NYSE: SDRL ) and Transocean (NYSE: RIG ) have been on the decline this year after competitor Noble (NYSE: NE ) made less-than-enthusiastic predictions about the drilling market in early 2014. During earnings, management said that early 2014 would see weak demand, bringing up fears that the deepwater drilling market may eventually become oversupplied as new rigs come online.
But if we take a longer view, all three of these companies sign contracts that extend for years and more than half of the world's new reserves are now coming from deepwater. Even Noble's long-term comments weren't as bearish as the stocks have been this year.
Mike Klesta sat down with Fool contributor Travis Hoium to see what to make of drilling earnings so far this year and whether we should bail on ultra-deepwater drillers.
Find the winners in the domestic energy boom
Record oil and natural gas production is on land and offshore is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.