September 19, 2007
– Comments (4)
Watch this rig jig: ... July 23rd highs are again in sight. Hold these two past those highs at your peril!
Not a chance. RIG and GSF are in a very sweet spot of the oil patch. As long as oil stays above $50, demand for RIG will be very high.
In the short term, maybe you'll be right. I'm long RIG, I own it, I'm keeping it in my CAPS portfolio (where I'm ranked in the top 2%), I'm holding, and if it gets anywhere near $80, I'll double my stake.
If you're going to add to a position for more than a quick trade, compare the prices of RIG and GSF in terms of the new company. Since the merger announcement, GSF has consistently been a percent or two cheaper in terms of the newco.
I own a little GSF and am a little concerned by the latest SCORE report. The strong bull case for the drillers is the ability to roll over new contracts at higher rates and this report shows that leveling off. Not ready to sell yet, but am watching for anything else pointing to dayrates leveling off.
Look, ... RIG and GSF will become a "new" RIG soon, ... and we have no idea what that new RIG will look like. In the process of the two companies becoming a "new" RIG, there will be a tremendous amout of leakage - millions will evaporate through leagal means, of course, but without any whatsoever benefit to us lowly shareholders. I suggest, therefore - if you are an investor (... but not a speculator) that you strongly consider this fact. Just an opinion of someone who has been doin' rig-jig since about Feb., 1998.
C., ... off soon to a different rig, ... different jig (... say, more of ATW, DO, NE perhaps? )
Transocean, GlobalSantaFe Deal Clears Antitrust Period
Transocean Inc., the world's largest offshore drilling contractor, and GlobalSantaFe Corp. said the antitrust waiting period for their proposed combination ended early, clearing one hurdle for the transaction's closing. The deal, announced in July, includes a $15 billion cash payout to shareholders of both companies. Shareholders of Transocean and GlobalSantaFe will also get shares in the new company, which will retain the Transocean name and trade on the New York Stock Exchange under Transocean's symbol "RIG." The value of the new company will be about $53 billion, including debt. The $15 billion for the cash payout to shareholders will be funded through a bridge loan due one year after closing. The transaction is expected to close by the end of the year.
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