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Noble Corporation plc Message Board

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  • Box7 Box7 Jun 8, 1998 9:39 PM Flag

    Time Frames Keep Slipping Out

    Somebody has you sold.

    It is a contractor,
    with limited ability to grow earnings.
    It is also
    limited by people, as those that know how to operate
    their rigs are old and tiring. They just want to cash
    in one more time, on the options.


    Remember, NE was NDCO, and sold at 2 5/8 just 6 years
    I bought below 5, and sold last year.

    rigs are not made of titanium. Do you know what their
    lifespan is? Think about it.

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    • Re. Lifespan, not made of titanium, etc. All
      true, but the more rigs depreciate and the more rigs
      that are removed from the available pool thru
      attrition, the scarcer the supply. This will translate into
      higher day rates and utilization rates eventually. So
      your statement about limited ability to grow income is
      only partially true. Day rates can rise another 50-60%
      from current before the market could support
      significant new building. My view of drillers is that you are
      not only buying a potential revenue stream, you are
      buying part of a dwindling pool of capital assets. It
      may not work for every investor, but it works for me,
      particularly with contractors in the offshore segment, where
      the asset base is relatively small vs. land drillers.

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