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 Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Experimental Floating Wind Farm Nears Installation

Launched in March 2012, the Fukushima experimental offshore floating wind farm project sponsored by the Ministry of Economy, Trade and Industry is nearing the installation

NAO Announces Financials, Declares Dividend

Nordic American Offshore Ltd. has declared a dividend of $0.45 per share for 3Q2014, as previously announced. This is the same dividend as for the previous two quarters.

First Libra Offshore Oil Well Confirms Discovery

Libra consortium reports that drilling the first well in the area extension of Libra, the 3-BRSA-1255-RJS (3-RJS-731), confirmed the discovery of good quality

Tanker Trends

Iran Gas Exports to Europe Would Take at Least 5 Years

Iran would take at least five years to start exporting natural gas to the European Union if sanctions were removed, industry experts said on Wednesday. Last month,

CSC Launches Gas Storage Integrity Management Team

UK-based Chesterfield Special Cylinders (CSC) has launched a new integrity management team to work with owners and operators of high pressure gas storage vessels as installed in rigs and ships,

China Aviation Oil Seeks Jet Fuel for Nov-Dec

China Aviation Oil (Singapore) is seeking up to 2.056 million barrels of jet fuel for loading over November to December, a tender document showed on Wednesday.

 
 
Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Port Authority Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1896 sec (5 req/sec)