Call over. RIG feels they are not liable for oil clean up and damage claims. Any reduction in domestic drilling will most likely be picked up by foreign business. Contracts pay RIG even on idle rigs at a lower rate. Company confident in its cash flow even with the gulf operations being limited. Confident in its position to pay any claims and pay its dividend.
My comment- the worst fallout in this disaster will be the president's decision to slow drilling in the Gulf which will create higher oil prices and create more job loss. Given all this information a $11 billion market cap loss seems excessive.
VERY positive call. Would have liked to hear the CEO say they would "consider" buying back stock. However, with 75% of the business coming from outside the US and also with the majority of Rigs in the Gulf not to be effected or the owners have the ability to move them I can not see the downside at this price.
Termination rights under contract for use of rigs, have a significant termination fee that makes it commercially significant. Said even if every rig in gulf was shut down, RIG can still operate business and pay dividend under the contracts of the rigs.
BP has responsibility for operstions on the well. Under the contract, BP is responsible for the clean up and payout of claims. Said BP is doing this now and BP has a long history of honoring its contracts. Indemnity under the contract is extremely broad.
Says some rigs are already outfitted with more than the required ONE shear ram. So if new regulatory parameters require more shear rams, RIG has this already on some of their rigs including this rig.