SDRL leveraged itself via all that debt and thus has way less safety in weathering an oil barrel price downturn.
The stance to keep the dividend was made when oil was over 100 bucks a barrel. Reducing the dividend is prudent now since the debt service has to be addressed during rougher times. If SDRL cut the dividend by 75 percent instead of 100 percent do you think that folks would be way happier?
My guess is any radical cut would #$%$ the SDRL believers; thus a cut of 75 percent or all would result in similar negative stock pricing after the cut.
All the oil companies dropped in this oil barrel price downturn; the highly leveraged ones dropped more. Thus CVX Chevron too hit a 52 week low many days ago. Chevron can weather a downturn more than SDRL since then have less debt; but they are not going to rocket to the moon upward *IF* oil rising back in a timely matter.
SDRL is not a super save company; it does have risk with all that debt. But it does have the ability to rocket higher if oil moves up.
The real question is how long oil will be down, weeks , months, years?
Having heard "global energy resources will be depleted in the next 35 to 40 years" my entire life by experts one sees it is bull dung since we have more reserves than when the predictions war made. i.e. we did not run out of oil. Thus it is all monkey poop wishing by doomsdayers. I heard this prediction as a little kid and later in the mid 1980's we still had oil. Thus the whole experts predictions were false 35 years later; AND the SAME false tenet gets preached every decade. They preach this saying every decade and after hearing it for 60 years you realize it is a recurring false prediction.
The amount of oil available rises with time as more is found. Thus during my life oil production has risen 6 times. You might as well worry about a shortage of songs, or cellphones; or people. Folks said we would run out of oil 50 and 100 years ago too. It is an ancient tale that when one grows older sees the end punted more decades down the road.
several experts on this board have said the bottom for SDRL will be zero, 5 and 7.5