Seeking Alpha Article: the Conclusion:
RIG and SDRL are definitely among the best in the offshore drilling industry. SDRL's fleet is very modern and ideally adapted to today's market model. However, this clear competitiveness has been only possible by contracting a high-level, long-term debt that RIG does not have.
RIG's fleet lags behind, as we can see above, especially in the semi-submersible rig sector. However, RIG's debt level is lower than SDRL and will allow the company to invest more in modern rigs, while retiring a cumbersome aging fleet. Despite the ongoing financial effect of the Macondo incident, still difficult to interpret adequately, I believe RIG presents a good opportunity for the long run, especially at this stock price level, between 41 to 43.
To illustrate this situation between debt level and fleet modernity, we can analyze and compare the ratio EV/EBITDA of both companies. SDRL's debt level related to its modern fleet is one of the highest in the industry and could be misinterpreted as a negative for growth because real EBITDA will lag behind compared to the future potential EBITDA related to the new rigs, not yet contracted and used.
RIG has a ratio EV/EBITDA 2014 around 7, while SDRL has been just above 9 (Using future 2014 EBITDA forecasted by the company, around $10 million per day,) and even 12+, based on the Q1 2014 alone for SDRL.
RIG offers a better value, especially after the huge upside that SDRL experienced these recent weeks. However, both companies should be accumulated for the long-term. RIG and SDRL are a BUY for a long investor's perspective.