Will Offshore Drilling’s Slide Continue?
Will Offshore Drilling's Downward Slide Continue?
Stock performance of offshore drillers
In this depressed offshore drilling (IYE) industry environment, November 2015 produced another month of negative stock returns. On November 20, as compared to the start of the month, the stock price of Diamond Offshore (DO) was nearly the same, while other drilling companies posted negative returns:
Pacific Drilling (PACD) fell by 27%
Transocean (RIG) fell by 17%
Atwood Oceanics (ATW) fell by 14%
Seadrill (SDRL) fell by 9%
Noble Corporation (NE) fell by 7%
Ensco (ESV) fell by 6%
Rowan Companies (RDC) fell by 6%
Oil prices and the offshore industry
Oil prices, the key factor in the fortunes of the offshore drilling industry, have remained below the break-even prices. The offshore industry (OIH) is highly influenced by oil prices, which affect the rates that exploration and production companies are willing to pay for drilling services.
Series overview
In this series, we’ll analyze indicators that you can track to get a sense of the offshore industry’s direction. We’ll see how slumping oil prices affected oil companies, which in turn impacted the offshore drillers. We’ll also see how the jack-up and floater demands differ and how this could affect the future utilization rates. We will also discover whether any particular region is doing well in this depressed industry.
Browse this series on Market Realist: