Is RIG going to augment its fleet with an acquisition?
Might RIG satisfy its need for newer rigs by making an acquisition? Strategically that may be the answer for their embracing some of Seadrill’s business model. I think Seadrill’s CFO is with RIG. Another thought is, S&P put them in the ‘500’ club. Why? Time for a call option on the would be acquired? Who might that be and when? The easy and cheap picking would be the smaller operators who are less able to compete in the soft market. i.e. I am not suggesting it would be Seadrill. But I will try to buy some calls on a few of the candidates! I suggest watching any of the competition that rises faster than the industry taken as a whole.
Rig is becoming more like Seadrill, thanks to the pushing of Icahn. Stay for the div. until next year when people start talking about how cheap this sector is, and the Major Oil Companies NEED to drill deep. RIG is a double in two years witha great div.
The dividend benefit is zero. It is first removed from your account on the ex-divided date, then given back to you on the dividend pay date. No net benefit. What's worse, is that you are taxed on those phoney 'dividends'.
Why acquire more when entirely too many rigs sat idle last year, and they already have two ultra modern deep water rigs under construction. Best to buy new equipment then sell it down the line as it becomes less economical than get used hardware in an acquisition that may have any number of problems with it.
Seedrill's fleet utilization was impressively over, on average 92%. The need for newer rigs is a given... RIG can gain a leg up by making an acquisition of smaller operators when the market is weak...called leveraging and taking advantage of their superior financial position, see BS. And taking a play from Seadrill book, they would be position to begin to rid themselves of the older fleet The expectation is that the market gets better around late 2015.... i.e. the E&Ps start trying to catch-up with their cap x expenditures that have been put on hold. The need for deep water production by 2020, is expected/needed to be 4 to 5x today's production. Let's not watch Seadrill further position itself to be the big winner. The world is changing and RIG needs to refresh its view-point. If the team can't do that we will watch them literally sink.