The industry is still building ships as fast as it can, and long-term contracts continue to be signed at attractive prices. Seadrill
Expanding into deeper water
One of the positive trends overall for oil drillers is that their ultra-deepwater drill rigs have been under contract before completion in recent years. This is in contrast to shallow-water rigs, which are being stacked regularly, doing nothing for shareholder returns.
Seadrill signed a five-year contract for $919 million with an additional two-year option on an ultra-deepwater rig that won't be completed until December. The company also signed a $204 million one-year contract for a new semi-submersible ultra deepwater rig that is under construction.
To expand its deepwater capabilities, Transocean
Old company, new name
Ultra-deepwater competitor DryShips
Before getting too excited about Ocean Rig as an investment, just keep in mind that George Economou is still the CEO and chairman, and his history of performance for shareholders isn't good.
Leaving the shallows
While most major operators are turning to deeper-water rigs to fill their fleets, shallow-water rigs are being left behind. Hercules Offshore
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Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.
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