|Directed by||:||Ron Shelton||Produced by||:||Bill Gerber, Steve Richards||Starring||:||Morgan Freeman, Tommy Lee Jones, Rene Russo||Production company||:||Entertainment One||Country||:||United States|
The Rally In Offshore Drillers Is Just Getting Started
The offshore drilling industry has bottomed and oil prices are now soaring.
Oil inventories are plummeting on strong demand even during a seasonally weak time of year.
As oil companies cash flow grows, they will once again seek out offshore projects.
The newbuild cycle that brought the industry to its knees will likely be the last newbuild cycle the industry ever sees.
Oil prices are coming back to life. Global demand is soaring on the back of booming global GDP growth and oil inventories are plummeting even during winter which is a historically slow period for demand. As oil prices and the cash flow of oil companies rise, oil producers will inevitably return to offshore with its long life assets. In this environment, offshore drillers are set to outperform. Even well off of their lows, many of their share prices could double and still be cheap. The industry will likely never embark on another newbuild cycle ever again, which means the future will be entirely about free cash flow. It's not too late to get in and buy shares of Transocean (NYSE:RIG) Diamond Offshore (NYSE:DO) or Noble Corp. (NYSE:NE).