Transocean's Fleet Diversity May Give It An Advantage Over Ensco

Ravi Nagarajan submits:Last week, we reported that David Einhorn’s Greenlight Capital took a large position in Ensco plc during the second quarter. Ensco was profiled in an article on The Rational Walk in early June and the company is scheduled to report second quarter earnings on Thursday, July 22. Here is what Mr.

By Bret Jensen:The market just had its worst week since October 2008. Energy stocks fell almost 10% as falling oil prices hit the sector hard. The sector seems like a ripe area to look for beaten down bargains. One stock that I like here because of its solid dividend, low valuations and good growth prospects is Ensco. Ensco (ESV):

By Power Hedge: Vantage Drilling (VTG) is a young offshore drilling company headquartered in Houston, TX but with much of its operations based out of Singapore. The company has a fleet of seven modern offshore drilling rigs that are evenly split between shallow-water high-specification jack-ups and ultra-deepwater drillships.

SL Advisors submits:By Henry Hoffman

By Power Hedge: Ensco (ESV), the second largest offshore drilling company in the world, announced its second quarter results on July 25, 2012. The company more than doubled its net income from the prior year quarter, due largely to its May 31, 2011 acquisition of Pride International.

Zacks.com submits: While it is well known to the oil industry that the ongoing drilling moratorium will continue through the end of this November, the Obama administration may lift it a little earlier. The Interior Department is set to release new regulations/guidelines for deepwater drilling anytime soon.

The first-quarter results and management teams' commentaries during conference calls with analysts reaffirmed my bullish take on the deepwater drilling market. Alf Thorkildsen, CEO of Seadrill (SDRL), summarized the growth drivers for deepwater drillers during a May 14 conference call:

There are a number of reasons why Ensco Plc’s (ESV) agreement to purchase competitor Pride International (PDE) makes sense for investors. But, for now, let’s ignore Ensco’s assertion the acquisition will be immediately accretive. And, let’s forget the $50 million in expected annual cost savings.