Please ensure Javascript is enabled for purposes of website accessibility

Tragedy on Transocean Rig

By Toby Shute - Updated Apr 6, 2017 at 1:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An offshore rig goes down in flames, putting the spotlight on another dangerous industry.

Just weeks after Massey Energy's (NYSE: MEE) disastrous underground explosion, the offshore drilling industry has its own black stain to contend with.

On Wednesday, Transocean (NYSE: RIG) reported that a fire had broken out on board its semisubmersible drilling rig Deepwater Horizon the previous evening. The rig had been drilling a discovery well for BP (NYSE: BP) in the Mississippi Canyon section of the Gulf of Mexico. On Wednesday evening, the rig was still on fire, and 11 crew members were reported missing. The rig sank on Thursday morning, and the 11 missing workers are feared to have been aboard.

This is a terrible blow to the industry because it has both human fatalities and a potentially significant oil spill. The well was reportedly flowing 310 barrels per hour on Wednesday, and some early attempts to plug the well have failed.

The timing of this accident couldn't be much worse, coming on the heels of the Obama administration's offering of an offshore drilling olive branch. It also happened to be Earth Day yesterday.

Health, safety, and environmental (HSE) practices often get short shrift when it comes to investor evaluations of the contract drillers. I know that I get as hung up on utilization and margins as the next guy. If any good comes of this week's events, it would be to retrain all eyes on HSE. On this front, Noble (NYSE: NE), Ensco (NYSE: ESV), and Atwood Oceanics (NYSE: ATW) are the standouts, according to EnergyPoint Research. This independent assessment underscores my confidence in this trio of best-of-breed operators.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Transocean Ltd. Stock Quote
Transocean Ltd.
RIG
$4.18 (-0.48%) $0.02
BP p.l.c. Stock Quote
BP p.l.c.
BP
$32.56 (-0.34%) $0.11
Noble Corporation plc Stock Quote
Noble Corporation plc
NEBLQ
Valaris plc Stock Quote
Valaris plc
VAL
Atwood Oceanics, Inc. Stock Quote
Atwood Oceanics, Inc.
ATW

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.