Diamond Offshore's and Seadrill's Recent Annoucements Expose the Truth in the Deepwater Rig Market

By Tyler Crowe – Jun 8, 2014 at 2:38PM

OTC: DO

Diamond Offshore Drilling

Market slump? Based on the contracts Seadrill is getting and the ones Diamond isn't, it seems more like a market shakedown.

Diamond Offshore (DO) got quite possibly the biggest insult one can get this past week. Statoil cancelled a contract for one of Diamond's ultra-deepwater drillships because it simply wasn't up to the task of handling Statoil's demands. Combine that with the delayed contract talks with Pemex for a Diamond rig and the fact that Seadrill (SDRL) just signed a five-year deal for one of its newbuilds for a whopping $605,000 per day, and you get an inkling on what is important in the rig market: rig specifications.

Find out more on how the quality of a company's assets are an accurate gauge for the future performance in the rig market today and why that bodes well for Seadrill, Pacific Drilling (PACD), and Vantage Drilling (NYSEMKT: VTG) by tuning in to the following video.

Tyler Crowe owns shares of Seadrill. You can follow him at Fool.com under the handle TMFDirtyBird, on Google+, or on Twitter @TylerCroweFool.

The Motley Fool recommends Seadrill, Statoil, and Total and owns shares of Seadrill. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.