Rowan endured the 1980's very well. They are
stronger today than ever.
RDC has $148 mil in cash with
$300 mil in debt paying no more than 6.9 %.
company continues to buy back stock and Gorilla V will be
put to work soon. Amoco seems to be trying to lower
the price on this rig. However, the contract is for
one year with no buy out clause so Amoco must put up
or shut up. Hopefully Amoco and Rowan work this out
and both win.
The management of this company
is admired by many in the oil service business. This
stock is a buy at this level.
have a much higher debt-to-equity ratio and less
cash on the books than RDC! So, if RDC gets into
trouble it is likely to be long after a lot of other
companies in this insustry??? However, I think that before
it " hits the fan", cooler heads will prevail and I
expect a wave of M&A's will take place. RDC could be
either the acquirer or the acquired!!! In any event, a
merger or acquisition could have a substantially
beneficial effect upon the stock price.....Keep your eye on
I'm not good at research. Does anyone out there
know if Rowan has the strength to endure another year
or two of low oil prices or are they one of the
weaker companies that may fold under the stronger
Here's how people loss money with RDC and other
value stocks. They buy it when they think it hits a
low/support level. Hold it for a few months, and then sell
out of frustration when it drifts down 5/8 below
their purchase price.
RDC will eventually have a
big 3-4X up move but it may takes 2-3 years. If you
can hold out you will do just fine.
One rule on investing in the energy sector is
always to assume that OPEC will shoot itself in the
foot. History has amply demonstrated that they will
agree to all kinds of production cuts, which would in
fact give them a net increase in revenues, but then
start cheating on there quotas.
OPEC is a
classic example of the paradox of the commons. By acting
together they could preserve their resources and maximize
revenues. But each member believes that it can get even
more money if its cheats while the members stick to
their quotas, so all wind up over time cheating and
therefore depleting their resources and minimizing
My advice is ignore OPEC and focus on global demand
and production capacity if you want to TRY to predict
future oil prices.
I got into a little bit of oil last year (ok,
timing is everything!) but feel the prices are
ridiculous now. Have some MIND (speculative, of course),
some RDC and HP. Still consider myself a novice, so
appreciate the input.
Will definitely look into your
recommnedations (after getting some SLB on board!).
I'm surprised the Saudis spend ANY money on
defense when they have the USAF and US Navy to do their
bidding for them. What do you think would be the price of
a barrel of oil if the cost of maintaining an
aircraft carrier task force, several air combat wings, and
ground forces were factored into it?
thought it was interesting that the Saudis keep so much
of their assets overseas "in case they need to go
away in a hurry..." Hmmm. Why would that be, do you
suppose? What would cause them to think that they might
need to hurriedly decamp at some point?
Now people are asking why, when
the kingdom seems to be so rich in cash, the economy
is suffering, one Saudi economist said.
answer, Saudi and foreign experts agree, lies at least
partly in the huge sums of Saudi wealth kept overseas.
Critics say the flow of Saudi capital to foreign bank
accounts and invested in property abroad is the most
significant indicator of deepening economic crisis in the
world's largest oil producer and exporter.
and foreign analysts estimate the sum of private
Saudi assets held abroad at $400 billion, described by
one Western diplomat as "fail-safe money in case they
need to go away in a hurry."
of at least some of those assets could be used to
cushion the impact of the oil price crash, leading to a
period of economic growth and stability, said Beshr
Bakheet, who runs a Riyadh firm of financial advisers.
The private sector needed to be given a bigger role
in running the Saudi stock market, largest in the
Arab world, and other Gulf Arab bourses if they were
"This is a very delicate issue
since most governments are rightfully worried about
uneducated small investors falling victim to pushy brokers
and bad stocks," Bakheet said in a report which also
noted that no Gulf Arab listed companies had gone
Defence, the biggest single item of
expenditure, rated no mention at all in the budget.
Saudi Arabia, the world's biggest arms buyer, never
discloses how much it spends on defence, although most
analysts settle on a figure of 30 percent of the total
Analysts predict delays on some defence
spending but the budget gave no clues where this would
"We're expecting defence spending will
fall this year," a diplomat at one Western embassy in
Riyadh said. "It looks like it will be cut by one
quarter to one fifth -- a big change. But it will still
account for one third of the total budget."