The more things change at Pride International
The drilling contractor has undergone an extreme makeover in recent years. Latin American land rigs? Left behind. Exploration and production services segment? Exit, stage right. Tender-assist rigs? Ta-ta!
Pride prizes the deepwater, and over the past year, it has taken on a triple helping of new drillships. Because some of these rigs, which won't hit the water before 2010, had no contract terms attached at the outset, they're a somewhat aggressive call on steady oil exploration activity for years to come.
Pride just keeps receiving confirmation that building on spec is a safe bet. The final uncontracted vessel just signed on for a five-year stint with BP
Other things are changing at Pride as well. In the first quarter, dayrates rose in most markets, and rig utilization improved across the board. Combined with one-time proceeds from asset sales, which dwarfed operating cash flow, net income was a meaty $240.7 million. But -- and anyone who's read my past Pride coverage probably saw this one coming -- the fact remains that EBITDA margins have not improved. I prefer to look at contract drilling margins, but unlike Noble
There's plenty of excitement coming from this company -- from swashbuckling Seadrill's recent sidling-up to more big-rig deals sure to come. Pride is pursuing more deepwater kits, and if they have to be on spec, so be it. If frugality floats your boat, however, I continue to recommend directing your offshore drilling dollars elsewhere.