Older rigs may have the "potential" of work cheaper but they definitely get older and more obsolete. And yes, their blow out preventers are in many cases preventing them from working in parts of the world that care about oil spills. Don't suppose you know what rate "justified the investment"? The cost to operate a new Gen6 Drillship is about $180k a day. Capitalization costs might add $100k a day. So if they get $400-450 which many think they will on new contracts, they still make a pile.
Translated from Russian:
"President of "Rosneft" Igor Sechin said that in 2014, the company expects a net profit of 400 billion rubles. ITAR-TASS.
"The financial condition of the company on the market better than our competitors. Calculations on loans on schedule. Our appeal to the government to do with our debt, "- said Sechin.
He also said that the company plans to close the end of the year the acquisition of 30% stake in North Atlantic Drilling Limited (NADL).
"We do not feel anxiety to close the deal," - said the head of "Rosneft".
Previously, it was also reported that the JSC "NK" Rosneft "and ExxonMobil discovered oil by drilling in the license area in the Kara Sea. This was reported on the company's website."
In two years, they will have the largest fleet of MODERN ultra deep water rigs and the largest fleet of MODERN, high spec backups. At least half of the rigs in the industry is over 20 years old.
I checked Rigzone. You are not talking about UDW rigs, HE rigs or High Spec backups. The price of oil staying below $90? I don't think so. And did you happen to notice SDRL is down $14 a share? So I agree, buy at the bottom. This could be it. And US will produce a LOT less under $90 a barrel.
Should be a strong Q4 for DRYS tankers. Now if only the BDI would cooperate….
It's about the same with rig rates over $600k a day. If they can get rigs at $450k a day, they drop their cost below that of tight oil and the wells are much, much more productive in general. UDW rates are likely to fall for a bit, but should recover as the delivery schedule gets more skinny and older rigs just get more old and in need of very expensive upgrades and special surveys. The risk with older rigs that have questionable blow out preventers is getting greater. It's unnecessary with all the newer rigs around.
I wonder if the fall in Q1 next year will be as severe as last year. The price of iron ore in Jan this year was over $40 higher than right now. The Chinese mines that close up in the winter anyway may not reopen if prices stay in the $90 or less range.
I have read that most of the wells are 50% less productive in the second year, so the drilling has to be nearly constant.
Nah. $6.85 week of Jan. 4th, never higher. 2009 was over $10, but that was in January 2009.
Funny when you think about "Chinese Growth" numbers. Say they grow 7.1% this year. That is actually as much or MORE growth than last year at 7.5% since the base is bigger.
So, yes, DRYS went up and down a lot in 2010. Started the year at about $6.80, fell by half by the end of June and then rose back to $6.30 by year's end, only to spend the entire year of 2011 falling back to $2.00 per share. That was when JR Mills and the cat person were so bullish. The events surrounding ORIG at the time probably were the reason. Signed for four new drillships and got some good contracts for the two semi-subs they owned at the time which were their only UDW rigs on the water then as well as one or more for the new builds on the way. They also sold $500 million in ORIG stock at the end of the year, taking their ownership down to 78%. I don't recall which generated enthusiasm, but the following 12 months sure sucked.