Prepare to witness the utter collapse of offshore drilling

I am not returning to the forum but cannot believe no one has started a thread on this news? Diamond in bankruptcy now with Noble to be filing very soon then will be Valaris and Pacific. There is not one drilling contractor not on the ropes buried in debt and with little to no work for the many dozens of rigs built between 2010 and 2015 when the sky was the limit and the building boom we witnessed as unprecedented. Dayrates for those rigs managing to pick up work now is in the toilet with the world awash in crude. Shareholder equity is utterly destroyed with stock in these companies becoming worthless after restructuring but even then with new shares being held by those holding the debt of these companies, the question is with far too many rigs built years ago for the demand of today and the future, some drillers will need to die and forever go away. Yes, I believe one of these companies will be Noble. As drilling contractors are cremated, what they have which might have value will ultimately be sold at a massive discount by creditors in some distant future to whoever might have some cash to spend. I expect a $650M 6th generation drillship going for $50M or even less after 5 years of sitting idle.

Then there are the support vessels and their owners. HOS is now bankrupt and I cannot believe even ECO is not seriously sucking wind. There will be blood in the gutters soon with these companies!

What was an industry barely surviving pre-Covid is now a dead industry no longer viable and absolutely, positively going to shrink drastically to a tiny fraction of what it once was. This is going to get very, very ugly over the next 12 months. I am certainly glad to now be a spectator on the sidelines and not going to be drenched by the bloodbath.

10 posts were merged into an existing topic: Offshore Crisis, the 2020… version