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Gold down 1.5% -- no one is worried about any type of crisis. If there was any worry, Gold would be up at least 1.5% or more. Greece means nothing to the price of gold, crude, or RIG. If China crashes, the rest of the world will enter boom times. Any Iran deal signed will never get through Congress. The pullback in RIG has removed a lot of weak shares and will benefit share price going forward. The drop in crude was overdue and had to happen. The evidence is found in the fact that RIG is up almost 4% on the day while WTI is down almost 2%. This little market shakeup has turned out to be a perfect storm of bullshit.
Rocking, Rolling, and Rigging on down the road.
This is real fear/panic selling and nothing more. I doubt if anyone reading my words will agree that WTI should be trading for $51 barrel at this late stage in the crude recovery. $57 yes, $51 no. There is no fundamental reason for this sell off.
That said... I am really proud of RIG. The lower crude drops the more strength I see in RIG. I even thing crude could drop back to $43 and RIG would hold at $14 and change.
WTI lower on increase in $US Dollar.
Xray, you got your facts wrong: RIG's lowest share price came about during lots of rumors that the company was going to cut out the dividend. The lowest close at $13.60 came when they actual cut from 75 cents to 15 cents. Five days later, RIG closed at $15.25, which I would use as a 10-year low based on fundamentals. Today's close at $14.92 represents that lowest share price in the last 10 years. As far as the lowest share price on record, RIG did close at $12.14 in January 1993. That's when I first bought the stock. I sold out in Aug 1997 for $68.00. I've been in and out of RIG ever since.
My problem with RIG is that I've been nervous over crude prices ever since WTI jumped up $18 from $42 to $60, rapidly bypassing the $50 range. This was too far too fast. Neither could I figure out why crude production continued to rise even after the storage tanks were full at the hub in Oklahoma. Then I found out that a lot of shale producers had insured their per barrel price at $90. This insurance still runs for another 10 weeks. Jesus, with the producers getting $90 per barrel, naturally they are going to produce as much as they can regardless.
Anyway, crude's move above $60 without lingering in the $50 range made me believe we were in for a correction. I think this is exactly what crude and RIG needed. We shook out a whole bunch of weak shares and replaced them with new blood. I also think we got rid of a lot of shorts and will soon get rid of a lot more. The large short side was lowering confidence of long term buyers. Anyway, the correction was badly needed and sure to happen. I got a truckload at $15.43 average and could not be happier. I think I'm now in for at least another year.
Moreover, there will be no Iran deal approved by Congress regardless of what takes place over the next week. The great majority of US citizens do not want this deal. No one in the US trusts Iran. Neither does Saudi Arabia or Isreal. They have the most to lose if Iran cheats on the nuclear deal since Iran has already pledged to wipe them both off the face of the Earth. No one can trust Iran as long as Ayatollah Khomeini is in charge. The Saudis and the Israelis have powerful friends in Washington. US oil producers also have a lot to lose and a lot of friends in Washinton. No deal will get past Congress regardless of what John Perry does. If there ever is a deal, it will not come until after the US has a new President and Khomeini is gone.
China's stock market bubble does not convert into a drop in crude demand. The bubble is caused by rules governing margin accounts. Too many shares outstanding on long margins. A correction is good for China. Besides, if China crashes, the rest of the world will recover stronger than ever. China might have imported a lot of crude oil, but they cut into the economies of many countries, such as the US, Japan, and other Asian countries. China folding would be a world blessing in disguise. The rest of the world would boom.
Greece means nothing to the world economy. Kicking Greece out of the Euro will only strengthen the currency and prevent a contagion. The Euro crashed less than a penny today--big deal. The Greeks did it to themselves. Just watch GOLD. If this metal starts to run up fast, sell your oil stocks and buy gold mining shares. Right now... Gold is holding above its 5-year low so there is NOTHING to worry about with Greece.
And, there is nothing else going on in the world to cause worry. The pullback in crude is healthy. It has instill confidence that RIG share price has hit its absolute bottom. Long-term investors can now buy in and replace the weak shares. This is good for other long-term investors and will reduce volatility.
A few more rigs drilling in the US means nothing. Rig prices are down to their lowest. Producers with money should drill now while day rates are cheap. What are they gonna do? Wait until the market is hot and then pay twice as much per day?
The world is expanding at a rapid pace. Expansion demands lots of crude oil in the $75 to $85 price range. The big profitable long-term discoveries will all be offshore. The majors know this and will be forced to start drilling like crazy to keep their market share.
Furthermore, OPEC countries, including Russia, do not want $50 oil. They will cut production on their own rather than sale then their oil at a cheaper price. No one wants $50 oil. The sweet price for brent right now is to slowly drift back above $60 by the 1st of August. WTI will follow at $57. and hold until October or November. We will see $75 oil by March of 2016.
This will correct itself in 2 months.
If someone wants to get in RIG at the bottom, they better do it in pre-trade first thing Tuesday morning. I predict an opening at about $15.25 which I consider the absolute bottom for RIG based on fundamentals.
An investor in RIG for over a decade.
By the way, I like posting my comments to the RIG board so I can go back 6 months from now and review any mistakes I made in my thinking.
Note to self: DOW down 37 points--- WTI trading at $54.33; RIG trading at $15.20 per share. WTI moves back to $60 by August 1st; RIG moves back to $18 -- $2.80 profit times ??,000 shares (nice). WTI moves to $65 by October 1st; RIG moves to $25.00 -- $9.80 profit times ??,000 shares equals (excellent). WTI moves to $75 by January 2016; RIG moves to $35 --- $20 profit times ??,000 shares (fantastic).
A steep drop in price on high volume is good for the long term because it gets rid of millions of weak shares.
$15 per share is likely to be the absolute low going forward!
Alway remember... when GOLD is down, the risk for any heavy stock market loss is zero.
Morgage Farm tomorrow and buy more RIG.
Two points: One, today would be a great day for shorts to reverse themselves! I expect volume will be high. Two, WTI is down on the 37 censt increased value of the dollar. When crude drops on the rise of the dollar, I consider this a sideways move of no real value to US traders.
Now is the time to load up on RIG! WTI is trading at $54.50. RIG trading at $15.11 in premarket. You will never get a better chance to own RIG at a cheap price! Now is the time to go against the crowd.
We are dealing only with fear; no fundamentals are involved. It makes no difference to the world economy if the Greeks go their own way. It might be a good lesson for Spain, Portugal, and Italy. Even the Euro has only dropped one stinking penny. The news coverage is way overblown.
I've also changed my mind on Iran. There will be no deal simply because Iran is demanding that the sanctions be lifted instantly. Their Supreme Leader has put his foot in his mouth and locked the door. He has stated no deal unless sanctions are lifted on signing. He can't back down without losing face. Even if our team gives in, Congress will never approve any deal with the sanctioned removed overnight. Iran will likely walk away with angry comments and the negotiations will be postponed for another 6 months.
Saudi Arabia, Iran's worst enemy, is a big factor in this deal; they have too much to lose and a huge team of lobbyists in Washington. Even if there is a deal, it will be kicked out by Congress--you can bet on it! In fact, they have already been promised that Congress will reject any and all deals so the Saudis have no fear.
Bottomline is that both the Greece deal and the Iran deal have no real determining factor on the price of WTI; the only effect these two pending deals are having is by causing investors to be nervous and fearful, which will disappear as soon as RIG starts to move up a little.
If you sell out at these prices, I assure you that you will be upset with yourself by tomorrow. WTI will quickly move by to $58 by Thursday and then to $60 by next Monday.
The recent increase in rig count is another head fake by market manipulators. The cost of hiring a rig has dropped drastically as drillers struggle to keep their rigs working. Now is the cheapest time to drill. If I were a production company and had a little money on the side, I'd drill right now and the temporarily plug the hole till prices increase. That's why the rig count did not crash any more than it did. Another point: Many producers insured their selling prices at $90 per barrel. This insurance does not expire for another 3 months. This explains why production has not dropped like it should. But just wait until this insurance hedge expires, production will drop like a stone. One more point, the summer driving season is underway with a big bank. The glut will disappear by 10/15 and prices will reach $75 a barrel by 01/16.
I have felt for weeks that $60 WTI was $5 per barrel too high for the current conditions. I think WTI should be trading in the $52 to $55 range, with Brent trading at $55 to $58. There is nothing wrong with these prices for the current market. Rig dipped to $13.50 when WTI was at $42. There is no reason why RIG will trade any lower than $16.50 with WTI holding at $54 and brent at $59. Moreover, I think we have another 4-5 months to wait until RIG deserves a $20 price and then another year until we see RIG at $35 to $40.
I also believe that a lot of drillers with older fleets, like Diamond Offshore, will go out business. Sea Drill will also be chopped up and sold off. So will several other offshore drillers. And, lots of offshore rigs will be scrapped by RIG and others.
One other point. I think the crash in the price of crude was engineered to save the world economy, and for no other reason. With crude at $120 barrel, there was no way the global recession was ever going to end. The world economy could not prosper with crude at $120 and neither could the oil industry. Solar and wind and other forms of renewable energy would have eventually taken over and the oil industry would have priced themselves out of the market. It was a huge greedy mistake to ever allow crude to run up more than $100 per barrel. The Saudis know this; they are installing massive amounts of solar panels all over the sun blistered dessert. What does this tell you about the further of crude oil? They will be exporting clean electricity soon. WTI will settle in at ~$80 barrel and be the primary fuel for the next 20 years and then we can say goodbye to the crude industry forever.
On the other hand, natural gas will prosper. Solar will be the primary source of electricity going forward. Natural gas-fired generators will be used to back up solar at night and on cloudy days. Natural gas will replace diesel in the trucking industry. In 50 years, when natural gas runs out, we will be using cold fusion to generate our electricity.
Bought so many RIG shares that I broke my axle on the wagon. Have to call the Binks people to get my load dropped off at the Bank. Anyway, I got a good feeling that RIG has been shorted all day today. My guess is we will start moving up at about 3:15 pm and see a strong close.
Loaded the wagon with RIG again at $15.61 per share. Can't believe I'm so lucky. Yesterday's move down was the right response; however, with WTI and brent up today, there is no reason for RIG to drop below yesterday,s close other than market manipulation.
Anyway, at $15.61, I can ride this bucking horse for the long pull.
I also read where many shale oil producers purchased price insurance for $90 per barrel from hedge/insurance companies. They've been selling WTI for ~$50 and getting $40 extra from the insurance companies. This would explain why they continued to produce crude that cost them $65 barrel--they were guaranteed $90. This insurance expires in 3 months. That's when we will see shale production and storage drop drastically.
I'm a real oil patch man. WTI flows thru my veins. The problem for me now is the middle east, China, Greece, and the potential spike in the value of the dollar.
Is there gonna be a deal with Iran or not? The way it sounds, Iran is determined to have nuclear weapons and will do so regardless of any deal. What they want now is for the sanctions to end immediately so they can sign a deal with several oil majors to expand their oil production by 2 million barrels per day. But after the Petro dollars are rolling in, they will go back to developing nuclear weapons. The only fools at the table is John Kerry and his sidekicks. He's dealing with the devil thinking he will win. How stupid does it get?
China's stock market is entering bear territory and might even crash. If China slows, down goes oil demand at the same time Iran is trying to increase production. If this happens, the Saudis, arch enemy's of Iran, will open the floodgates and pump all out to crash oil prices. Isreal will not set still while all this is going on. They will attack first.
Greece closed their banks and stock markets. I don't understand their purpose in rejecting the deal they been offered. Obviously, the Greeks want to stiff their creditors, which ain't a bad idea. If it works, it could start a contagion in other financially weak countries around the world, like Italy, Portugal, Spain, and 10 other poor countries that are buried in debt.
It's 10 PM in New York and WTI has already dropped 82 cents and brent fell 72 cents in Europe based most on the expectation that the dollar might soar.
Gold is up $7. I'm setting in all cash and thinking about Gold mining stocks. I just don't like being loaded in RIG with black clouds rolling in from everywhere.
92m shares sold short: (link) Help me understand. It makes no sense for the short side to continue to increase when the share price is so low already. This must be some sort of hedge but what kind of hedge could it be? I don't understand hedging. I just can't believe that ~1/3 of RIG shares are shorted be serious shorts.
It might even be some type of market manipulation in which some group or groups sell 2-3 million shares short on one day in an effort force the price down and scare the longs into a stampede out of the stock. Then they come back the next day and hopefully buy the short position back at a cheaper price.
I know this goes on all the time, but I never really knew the inside of such transactions.
Is there anything on the Internet that talks about this?
The fracking problems as I understand them is that the wells deplete in about 2 years so you have to drill like mad to keep production up. A lot of major fields are now showing signs of drying up. On the other hand, gas drilling seems to have a much greater potential, especially since there is no moratorium on exporting LNG. The problem with LNG is transportation to the market and its cheap price. Still onshore has a great GAS drilling potential, but fracking will be finished in less that 5-6 years. The majors know that so they are more interested in hitting a jackpot offshore. The future is with offshore drillers.
IMHO
ONE THING WORRIES ME: I don't like that oil moved back to $59.60 today mostly because I'm worried about all the negativity that will come out before the final meeting to settle the Iran deal on Tuesday. I now that crude will take a heavy hit on Monday and Tuesday. As we all know, Iran pledges to pump 2 million more barrels a day. Can they do it? I doubt it unless they cut a deal with a large US major producer. Anyway, it's not the extra oil production that worries me. It's the effect all the negative publicity will have on investors. And, there will be hundreds of shorts predicting crude back to $40.
Anyway, I did not like the way RIG stalled at $16.40 in view of WTI back up to $59.60 so I dumped my entire load at $16.39 average. I hope it doesn't cost me any money, but I want to wait until after the Iran deal is settled. That is the last stumbling block as far as I'm concerned.
Rig retreats. But as I told you in Post 1966, wait till 10:30 and see what happens.
Don't see out now... buyers are still there. Here's what's going on: If the buyers keep chasing the stock higher and higher, sellers will withdraw their shares and wait for the buying to top out in hopes of getting the highest price. Buyers know this so they stop buying, and might even starting selling shares short to let the price fall back down, which teaches the sellers to sell when they had a good chance. This is what's happening right now. Buyers step away for a coffee break to allow the excitement to cool down. They'll be back soon, buying shares with the idea of slowly accumulating. This type of buying is good for the longs since it clears out a lot of weak shares that would never hold on for the long pull.
You can expect this on again off again type accumulation to last all day. Personally, I hope the stock don't get much higher until Monday. Give the buyers the weekend to contemplate a sweet deal on Monday working.
Regardless, I'm convinced, especially after this morning's action that RIG is way oversold. I think the share price will hold at least at $15.50 even if WTI drops to $50.
So, the absolute best idea with RIG now is to buy all you can and hold until the end of 2015, which is exactly what I intend to do.
I see WTI at $65 by the end of the year. I see RIG at no less than $25. That's at least a 50% profit for holding only 5 months. I also think most folks on this group agree with me.
2.7 million shares in the first hour. And, WTI acting like it wants to run up towards $60. Watch out shorts!
I'm sorry, Maybe its level 2.
WE got some selling resistance at about 16.40 to 16.45 --- but we lost of volume. A move like this could trigger and short squeeze. It's a slight chance, but the action we have now is in the face of a %0.70 drop in oil price. If oil turns around and it has many times over the last few weeks, we could indeed trip a short squeeze.
The daytrader in me says sell but not going to it. I liked RIG for a long time. I made over $300,000 buying RIG in 1998. I think the chance to make at least $200,000 over the next 2 years is almost guaranteed. And, I think the worse bullshit is over.
Holy shit... we just moved through the resistance I was talking above. Shorts had better reverse themselves.
I'm watching RIG on level 3. Very strong buy-side with less shares to sell all the way up to 16.10; this action is in the face of a 70 cent drop in crude prices. This confirms what I said yesterday. RIG is oversold! We'll be back to $18.00 by Thursday of next week.
I'm in RIG to stay.
The dollar is up 30 cents so oil prices with drop slightly. I also see that WTI is trading 75 cents down prior to the open, but RIG is holding above $16 in the pre-market. I don't expect the stock drop much, but we see a bit of short selling pressure from market manipulators trying to scare some cheap stocks from RIG investors. Best advice is to wait until about 10:30 and see if the price drops. Anything under $16 is a steal. And remember, WTI has been bouncing back and forth between $58 and $61 so this is likely just a normal bounce.
Just remember not to bitch about a weak oil market while you are buying extremely weak shares--the two go together like ice cream and apple pie. If you concentrate on the weakness of the market without looking at the weakness of the share price, it will keep you from buying in at the right time. Sure, there are many times when the oil market and share price don't agree with each other. This is the favorite time for an oil stock picker. Right now... the price of RIG is just too cheap for WTI bouncing between $58 and $60. RIG at $16 is too cheap even if WTI fell to $48 to $50 range. Something has got to correct. RIG should go to $20 or WTI should drop to $50 to reach a balance in my opinion. In other words, buying is a $16 is no brainer. Sure, the stock might go down to $14 if WTI drops $10, but as soon as the market realizes that $16 is a fair price when crude is selling for $48, the share price will come back to $16. The only thing RIG must do is maintain a decent cash balance and watch its debt, which I think everyone will agree that management is doing just that. They postponed delivery of the new rigs until 2018. They are scrapping many old rigs to reduce overhead, but they are not in a mad rush to do so.
I also think the days of the frackers are numbered. The depletion rate is just too high and the majors know this. The offshore market is where the big discoveries will be found, the majors also know this to be true. Shallow water natural gas is another prize the majors will be investing in heavily. The natural gas market will be huge going forward--somebody has got to drill these wells. These means that the utilization of older rigs will increase so there is no real need to scrap too many to raise day rates. There will be plenty of gas-drilling work for the older rigs at cheaper day rates. And, plenty of oil drilling work for the modern rigs at higher day rates. It really not a modern fleet like SDRL that will earn the most. Rather, it is the drillers, like RIG, with the largest most variable fleet that will earn the most profit is the new market.
The market sees this. The share price of Diamond Offshore, with its beat up fleet, is doing relatively good because its cost are very low. It can survive on the cheap prices the smaller producers want. So can RIG. Don't be surprised when RIG beats on earnings. I really think this new CEO, with is strong financial background, is doing a good job--a lot better than the old one.
Why waste your breath on words like the "oil markets are far from heating up?" If the oil market was hot, you'd have to pay $60+ for RIG. Buying oil service stocks is all about gambling. If you're not a gambler, walk away from the table.
You are preaching gloom and doom because you are foolishly short RIG. I've been buying this stock since the early 1990's. I knew the stock price ran up too far three months ago so I warned this group and moved out. Now that RIG has over-corrected as all stocks usually do, I sold out everything and jumped back in. Maybe $16 in not the bottom, but I don't see how this stock can sell any cheaper with WTI range bound between $58 and $60. It was selling for $14 when WTI was at $42. I thought crude would drop to ~$55 and am surprised that that has not happened. Why? I do not know. I think $55 is the right price for now, but I've learned over 20 years that them market knows more than I do. But with RIG at $16, it does not matter whether oil is $55 or $60 because $16 is too cheap for even $50 WTI.
My bet is that a lot of shorts jump on RIG again and that's why it's down. Their better the deal with Iran will flood the market with crude, but I don't think that's gonna happen. Even if there was a deal, it would take Iran 2-3 years to ramp up production. Then you got the oil card, Isis. There has to be a big war to separate these idiots for the oil that feeds them. This battle has to take place in the middle east. When it happens, a lot of oil facilities will have to be taken oil, which could spike a huge run-up in crude to $80. So the way I see it, the Iran card and the situation with Isis balance each other out.
I'm betting RIG will run it again like it has done a thousand times. Rather this time it will slowly move back toward to $20 to $22 range by the end of the year when WTI reaches $65 share. And... there is indeed a bit of glut on the market, but this will correct itself as we move into the summer driving season.
By the way, the #1 lesson to learn in the oil patch is that everything you hear or read is all guesses--no one knows for sure what the future will bring, especially those that call the oil market one year in advance.
The oil patch trades on human sentiment and enthusiasm. Investors get excited about making a killing by buying RIG at the bottom. The market goes up and down--the daily bombardment by the gloom and doom folks wears on the excitement and many go back to looking for slow, sure profits from stock like GE.
But if you're a gambler and like big profits... then load your truck first thing Monday morning and hang on for a wild ride. If I'm right, and I am more often than not, we will see WTI selling for $70 by Christmas and RIG selling between $20 and $25.
Anyone that says they know what's gonna happened is $2016 is full of Texas bullshit.
The good side of RIG at $16 over the weekend is that everyone will be looking at the stock trying to figure out how many shares they can afford to buy on Monday.
There will always by "tough times ahead" for a $70 stock when it is selling for $16. That's the discount you get for the "tough times coming" Buyers must weight the discount for tough times ahead against the chance that the stock will return back to $70 and return them a profit of $54. That's 437% ROI. The formula for calculating the discount value of "tough times ahead" is to deduct 50% from the potential ROI and then multiply times the cost of the shares. This will give a clear picture of future profit or loss.
Looks like you can figure RIG at a minimum profit of about 42% per year for the next 4 years.
On the other hand, you could go short RIG and hope the tough times discount is not high enough. In that case, you might make 5% return, or you could lose out completely if you get caught in a short squeeze.
Personally, I think the tough times discount is fantastic. I just spend all my money on RIG stock.
RBC analysis are smart. They lay out the worse case scenario so their insiders can buy RIG on the cheap. Thanks, RBC! Keep downing RIG si I can buy some more.
Back in with a truckload at $15.95 per share.
I can't understand. RIG was selling for $14.50 when oil bottomed at $42. Now WTI is up to $60 and RIG selling for $16.00. Something ain't right. RIG is making the right decision. The economy is getting better. More people working. More trucks on the road. Capex spending will have to increase. Bla bla bla!
The only thing I can figure out is that today is just my lucky day thanks to a bunch of stupid RIG sellers. ha ha he he
One more point: Crude could rally 13% over the next few weeks.
Daily FX Report
Two years ago SDRL was selling for about $47.00 per share.
SDRL has the most modern fleet of all drillers.This cost them a lot of money so they have some debt. But this debt is secured with a modern drilling fleet. SDRL will solve their money problems.
Having the most modern fleet increase the demand for their rigs over other drillers. This is the big plus for SDRL over RIG and others.
Nor does SDRL need to scrape any rigs. This means they do not need to take huge write-offs against profits.
Sure, offshore drilling activity is slowing down. But this will not last forever.
There is evidence that frackers will have to deal with a lot of wells going dry. Fracking is not a reliable way to maintain steady production. The biggest discoveries will come from offshore operations.
Here's the big plus: SDRL is now selling for $10.85 per share, down $36.00 per share from where it was 2 years ago. This is less than it was selling when WTI was $43.00! If share price recoups back to $21.70 by this time next year, you will only double your money. If it goes to $32.00, you will only triple your money.
Stock traders are gamblers. They like to bet on a stock with a 200% 2-year payoff potential. That's why I'm back in. Others will see this and start accumulating.
At these numbers, SDRL is a super strong buy. There are a lot of big money traders that would rather convince you that SDRL will collapse. That because they want to buy the shares cheaper for themselves.
If you want to play it safe in the oil market, buy XOM. You'll make a 5% return on your investment and you'll sleep good. Want to earn 200% return? Then buy SDRL.
Nice close! Bulls and bears going at it hot and heavy. The bears were running out fast and the shares were being eaten alive by the bulls. It's like taking a healthy crap. I'm glad to see the weak shares run for the exit. Tomorrow will be a great day if WTI crude will just hold near $60.
every time SDRL is ready to move up to $11, one seller dumps ~10,000 shares. There's not a lot of sellers once we break $11. Why this jerk don't hold off for 30 minutes is beyond me. Let's just hope he runs out of shares before the close. You'll know when he's out --- SDRL will jump to 11.05 right away.
Can't believe we can't take this seller out at $10.91... right now there is about 70,000 shares offered between 10.90 and 11.00 This should be a cake walk but its seems buyers are waiting on a little pullback. One good buyer is all we need to jump to $11.00 From $11 to $11.20 looks real easy.
Volume is good. We have a few big sellers moving out at below 10.90--they should be out any moment now. Next heavy selling will come at $11.00... we will close the day at $11.20
By the way, the SDRL desk is playing a few games with the bid and ask numbers.
Back in again with a big chunk of SDRL under 10.80.
T. Boone Pickens said the Saudis were bluffing. I believe him. The Saudis are afraid that fossil fuels will lose out to solar power. They have their eyes set on the world's largest solar power stations set up all over their huge dessert. They have lost of worthless sand and lots of hot sun. They think if oil goes back to $100.00+ Solar will win the contest and they will be left with a lot of worthless crude still in the ground.
But I think crude will be in demand for another 20 years. I also think the frackers have seen their hay day. Their gonna start drying up and then where's the crude coming from?
Offshore! That's where it's at! SDRL is bloody steal at these numbers.
Even after the warning about tough times ahead, I can not see this stock below the $13.00 range.
The manipulators are writing analysis reports with angry tones. You can tell they are trying as best they can to scare away the market and point out every negative imaginable. So... I admit there are hills to climb for SDRL but what positives will management come up with to overcome them?
Moreover, saying there will be tough times ahead can be taken in many ways. To some people, tough means simply that we have to work harder. Tough times ahead has all sorts of meanings. It certainly does not mean that SDRL is going bankrupt in 6 months. This company has the most modern fleet in the business and will turn up on top. You can produce crude without drilling a hole. The major discoveries are to be found at sea--no West Texas. Offshore drillers will have a good year... you can count on it.
If I was writing a fair analysis, I would point out the negatives and then I would point the various things management could do to get over the hurdle. SDRL has new rigs being delivered, but this don't mean that management cannot get a good contract for these new rigs before they arrive. Nor does it mean that management cannot negotiate a deal to delay delivery. Surely, they will work on both ends and have some ideas of their own. Maybe that is why they hired the new CFO. This guy is probably a genius at raising capital.
Furthermore, everyone seems to think that WTI crude will be range bound between $55 and $62 until mid-2016. I can't believe this. What about OPEC? Are they gonna set still pumping maximum output at $60 when they could lower the quotas and pump a few million barrels less at $75 to $90 dollars? They'd be damned fools to give up $25 to $30 extra per barrel just to hold onto to their damned pride.
WTI ran up too fast to $62. Everyone got excited and ran SDRL to $14. The timing was premature for crude to rise and for SDRL to rise. WE need to be a bit more patient.
Offshore drillers need to scrap some rigs... they know it and they are doing it.
OPEC also knows that they are playing a losing game by not controlling production. They are the only organization that can serve as a swing producer. They need to invite more countries into OPEC and get bigger. They MUST reduce their output and or brent will drop to $45 and stay there until hell freezes over. The big losers will be the Saudis.
OPEC needs to make a deal and back off the insanity of over-producing.
We will never see $100 again, but producers will still need to drill.
This is a planned market manipulation so the shorts and hedge funds can clear. Normal volume will double these two groups clear. The share price will recover later today and there will be no chance for a squeeze.
WDI will hold at about 57.00 barrel and we will trade sideways for a few more months and then WDI will make a second run at $70.
Offshore driller will do just find if they scrape the excess rigs.
I know something like this was coming, but it still caught me off-guard.
This ain't bad!
HAMILTON, Bermuda (AP) _ Seadrill Ltd. (SDRL) on Thursday reported first-quarter earnings of $427 million.
On a per-share basis, the Hamilton, Bermuda-based company said it had net income of 86 cents.
The results beat Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 62 cents per share.
The offshore drilling contractor posted revenue of $1.24 billion in the period, missing Street forecasts. Four analysts surveyed by Zacks expected $1.26 billion.
Seadrill shares have climbed roughly 7 percent since the beginning of the year. The stock has dropped 66 percent in the last 12 months.
SDRL beats estimates by 22 cents yet the market is disappointed because real earnings were down from 4Q14. So is the price down by 50% from 4Q14. Seadrill selling at $25.00 per share verse $12.73 is a huge difference.
I sure don't see a reason for SDRL not to rally a little. And I can't imagine the stock sliding back to all time lows with WTI at $57 verse $43.
To me, this is one huge buying opportunity and I think some smart buyers will be accululating.
Seadrill beats by 21 cents!!!! Rally time.
I loaded the truck down to the axles with SDRL. I think tomorrow's earning announcement will launch SDRL above $14. It might even trip a short squeeze. Now wouldn't that be nice.
I also notice there are a few gutless investors running out just before the closing bell.
No guts! No glory!
Price is bouncing around like a yo-yo because nervous day traders are pulling the trigger when WTI moves 2-3 cents. Everyone wants in when WTI bounces back above $60, but they also want to jump out on every little dip. No one's sure if WTI is going to crash or bounce back. I think it's heading back to $62 and then back down to $58 3-4 more times in the next month or so.
Volatility and day trading is the game now. My advice is keep lots of dry powder