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What: Shares of offshore driller Ensco plc (NYSE:ESV) fell 22% in September. After a small rebound to begin October, Ensco's stock is still down more than 46% so far this year after falling by 47% in 2014. Ensco investors have lost a lot of value during the past 21 months:

ESV Chart

ESV data by YCharts.

Ensco's shares weren't the only offshore company's shares to fall last month:

ESV Chart

ESV data by YCharts.

The biggest culprit? Probably a group of relatively good earnings releases from offshore drillers in late August, which caused many offshore drilling stocks to rise sharply before the reality that those results -- the product of long-term contracts signed in years past when oil prices were much higher -- are likely to be short-lived. 

Now what: This isn't anything new to report, Fools. Much of the pain for offshore drillers is coming during the next year. The majority of the work being done offshore now is from legacy contracts, not new drilling deals. One only has to look at the sharp decline in contract backlog across the industry to see the writing on the wall. 

Ensco's situation is unique in that it doesn't have as many newbuilds on order as some of its competitors -- which is generally being considered a positive now with very little new work out there, and too many drilling vessels already operating. But Ensco's problem is that it has a large fleet of older vessels that are less cost-competitive than newer generations, and also less capable. This will put the company at a competitive disadvantage as the downturn lingers. 

Either way, it's hard to really call any offshore driller a great (or even good) buy right now. Transocean and Atwood Oceanics are two that are probably the least risky, and may be able to take advantage of the weakness to grow; but until things improve, it's probably best to just sit on the sidelines and let things play out. You may end up paying more for that certainty, but you'll have a better chance of avoiding a very bad investment decision.

Jason Hall owns shares of Seadrill. The Motley Fool owns shares of and recommends Atwood Oceanics. The Motley Fool recommends Seadrill. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.