Why You Shouldn’t Fear the Current Storm in the Deepwater Drilling Sector

Photo credit: Seadrill 

For deepwater drillers like Seadrill (NYSE: SDRL  ) , Transocean (NYSE: RIG  ) , and Ensco (NYSE: ESV  ) it has been a rough year. The stock price of all three companies have lost value this year, though that loss has slowly been eroding away as investors begin to realize that deepwater is still in the midst of a multi-year drilling boom.

Still, investors see the current lull in the market, where just seven rig years were contracted last quarter according to Seadrill, as being powerful enough to sink this sector. However, we're not only seeing signs of life in the sector, but looking out over the longer term we see a boom that's just getting started.

To help investors understand that longer term outlook I created the slideshow below. It explores the remarkable market fundamentals of the deepwater sector, which all point toward robust conditions for deepwater contract drillers like Seadrill, Transocean, and Ensco. 

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  • Report this Comment On June 30, 2014, at 1:54 PM, spokanimal wrote:

    This is nothing but a shameless teaser for a paid article lead-in.

  • Report this Comment On July 01, 2014, at 5:43 PM, awallejr wrote:

    Nice slide show.

  • Report this Comment On July 04, 2014, at 5:12 AM, marineoffshore wrote:

    Drilling sector is going through a tough phase which is bound to last for sometime. People keep saying that long-term outlook looks strong despite an incredible success of shale oil.

    If you are looking for some sort of short-term gains by luck you can look at all these offshore drillers. For long term industry outlook is very uncertain. Offshore drilling will have its importance but it's not at a growth stage currently.

    Here's a very simple blog entry to show why:

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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Related Tickers

9/4/2015 12:28 PM
SDRL $7.02 Down -0.24 -3.25%
Seadrill CAPS Rating: ****
ESV $15.50 Down -0.79 -4.85%
Ensco CAPS Rating: ****
RIG $13.34 Down -0.04 -0.30%
Transocean CAPS Rating: ***