U.S. Offshore Driller Consolidation Expected in 2007

Friday, December 08, 2006

According to Reuters, tight demand, attractive valuations and a Norwegian company that has said it is ready to get bigger have sparked widespread expectation for consolidation in the U.S. offshore drilling sector in 2007. Possible scenarios include a leveraged buyout by a private equity firm, large-scale recapitalizations or the acquisition of a U.S. driller by an overseas company, U.S. analysts said. And a lot of industry attention is focused on Norwegian driller SeaDrill Ltd., which said in no uncertain terms in November that it was looking to grow.

SeaDrill is controlled by Norwegian shipping magnate John Fredriksen, who analysts credit with the know-how and experience to make an acquisition work, citing his leadership in building tanker company Frontline Ltd. SeaDrill also bought another Norwegian oil driller, Smedvig, earlier this year and has risen to a number six ranking worldwide since it was founded in May 2005, the company said. LBO? Offshore drillers are also seen as juicy targets for private equity firms who expect the companies' profit cycle to extend beyond 2009, a scenario that equity investors are not pricing into the stocks, analysts said.

Drillers' profits have surged and available rigs have become scarce and expensive over the past two years as oil and gas producers have spent heavily to take advantage of sky-high energy prices. Bear Stearns analyst Robin Shoemaker recently wrote in a note to clients that Houston, home of many drilling companies, is said to be "crawling" with private equity firms looking to make deals. But because U.S. drilling executives who have lived through boom and bust cycles are wary of merging with each other, a leveraged buyout or acquisition by a foreign company such as SeaDrill is more likely, analysts said. So far this year, the Philadelphia Stock Exchange Oil Service index, which includes some drillers, has risen nearly 16 percent. Source: Reuters

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


Sandra Weakens to Tropical Storm off Mexico's Coast

Hurricane Sandra weakened to a tropical storm on Friday and was expected to continue losing strength as it approached Mexico's Pacific coast, the U.S. National Hurricane Center (NHC) said.

Extended Warranty from Yanmar for Sailboat Engines

Yanmar Marine International B.V. has introduced an extended 3 years’ period of YANMAR Limited Warranty for Sailboat Engine Models. This extended warranty of

Fugro's Havila Harmony to join MH370 Search

Fugro is providing an additional vessel, the Havila Harmony, to join the search for the missing flight MH370 in the southern Indian Ocean. From the 93-metre multi-role vessel,

Tanker Trends

Idling Fleet Continues to Surge

Owners are rapidly laying up containerships as the market slows. The size of the idle fleet will get bigger while rates and profits slide, says Drewry Shipping Consultants Limited.

Egypt to Complete East Port Said Side Channel in 2016

Egypt plans to complete a side channel in East Port Said, near the Suez Canal, that would speed up shipping and allow ships direct entry into the port by the end of June 2016,

Concordia Maritime Charters MR Tanker

Concordia Maritime has signed a contract for the charter of an IMO2/3 class MR tanker, the company announced today. The vessel will be chartered jointly with Stena Weco,

Maritime Security Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0546 sec (18 req/sec)