Drillers Shack’s Post

Do more or less M&A, and/or leveraged buyouts, happen closer to market/economic bottoms or tops? "...this should prove our continuously innovating Offshore Deepwater industry is robust, fiscally responsible and ready for another 30 years." Agree that "innovating" is robust. However, I wonder if they are preparing for (negative economic) impart in the short term (18-36 months).

𝗡𝗼𝗯𝗹𝗲’𝘀 𝗮𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗼𝗳 𝗗𝗶𝗮𝗺𝗼𝗻𝗱 𝗢𝗳𝗳𝘀𝗵𝗼𝗿𝗲 𝘀𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻𝘀 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝗶𝗻 𝘂𝗹𝘁𝗿𝗮-𝗱𝗲𝗲𝗽𝘄𝗮𝘁𝗲𝗿 𝗿𝗲𝗴𝗶𝗼𝗻𝘀 Noble Corporation’s acquisition of Diamond Offshore Drilling significantly strengthens its position in the golden triangle, as well as the high-spec markets of the North Sea and Australia. This acquisition raises Noble’s market share in the floater market from 9.2% to 14% and gives it the largest market share (24%) of 7th generation drillships, surpassing Transocean’s 20% share. As a result, combined, Noble will own and operate a fleet of 41 rigs, including 28 floaters and 13 jackups, becoming the fourth largest drilling contractor, following COSL, ADES, and Valaris. #spglobal #upstream #offshore #Acquisition #OffshoreDrilling #northsea

A new powerhouse on the offshore drilling rigs global market.

Westwood anticipates a mixed offshore drilling market for year-end 2024, with decreasing rig construction, selective asset acquisitions, an increase in working drillships, potential declines in semisubs and jackups, and regional growth in Latin America and West Africa, while the Middle East remains the primary jackup market despite some suspensions. #offshoredrilling #offshore #oilandgas

Great move and congratulations to Noble & Diamond! In a world of relatively high rig rates, it is perhaps easy to forget that the drilling industry still has too many players and too much overhead. So, great to see this move from Noble and Diamond. Will be interesting to see if this is a beginning of a final round of - still - much needed consolidation in the offshore drilling industry. Will there now be a move for Stena, Seadrill or Odfjell? From a fleet size point of view, this would make sense but obviously the owners will also have to see this. So, is it now over to Valaris or Transocean for the next move, or does Noble have another play up their sleeve, or will a couple of the smaller players gang up... or was this it, or how will the customers act? We have already seen Totalenergies take the unusual move to partially acquire a rig, seemingly as a hedge against rig rate inflation. But should oil companies really be rig operators? If that a hedge or a gamble? And, finally, the efficiencies likely to be gained from this consolidation will they be shared with the customers e.g. in the form of investments in better technologies/services, development of new business models or will shareholders pocket it all? Interesting times for offshore drilling. PS: See Noble announcement from this morning: https://lnkd.in/dbcdw3dt PPS: I only invest in market index funds, so I do not have any direct ownership in any of abovementioned companies or industry.

🤔.... Activity with Long term Contracts in Africa, Guyana, Suriname and Brazil a potential game changer that I'm sure influenced this move ....... Exciting few years ahead as market share and new territories have Oil and Gas friendly governments willing to grow there GDP and secure energy security #Oil #Gas #Energy #Economy 💡📊

Lost to history may be the phrase "Get big or get out...." or at least where the term was coined. Not that anyone should remember but this was the policy that Secretary of Agriculture Earl Butz laid out for American farmers in 1973. Butz's policy also included: increasing production, lowering commodity prices, eliminating supply management constraints, encouraging farmers to plant "fencerow to fencerow", and relying on export markets.  Offshore drilling can inspire rapid fleet expansion in the good times - but can have negative consequences when utilization falls. Seems getting "big" may offer a solution. Here is wishing my friends at Noble Corporation every success in their proposed combination with Diamond Offshore - and the opportunity to manage well through the cycles that characterize this industry sector. #energystrong #offshore #oilgas

Global Rig Market Consolidation! Noble Corporation is to acquire rival Diamond Offshore in a stock/cash transaction valued at US$1.6B. The deal will create a clear #2 in the offshore drilling market, with a contract backlog starting to match Transocean. Upon deal closure, Noble will boast a 41 rig fleet comprising 28 floaters and 13 jack-ups. For comparison, Transocean operates 36 floaters.   This is the latest consolidation in the offshore rig market. Since emerging from bankruptcy in early-2021, M&A has been central to Noble Corp's growth strategy - the company acquired Pacific Drilling in the same year, followed by Maersk Drilling in 2022. This will put further pressure on rig rates, which have been trending up post-Covid.

The management teams of oilfield service companies in the US are as disciplined as the management teams of E&P companies in the US. Although drilling activity has been declining for a year or more, the quarterly revenues generated per active frac crew in North America are down only 10%. Same with land contract drillers - average day rates are down only about 10% in the last year. And profitability is strong. Spears & Associates is seeing a SIGNIFICANT increase in the pace of OFS M&A this year. Discipline by management teams is winning back investors.

Noble acquired/merged with Diamond, on September 4, 2024, creating a leading offshore drilling company with a combined fleet of 41 rigs. What is the next merge to survive move in drilling? Transocean + Seadrill? They have a lot in common.