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The Globe & Mail: OIL AND GAS DRILLERS GET A LIFT

Bloomberg News
July 24, 2007

Shares of Noble Corp. and other oil and gas drillers rose after news broke of the Transocean and GlobalSantaFe deal, raising speculation that the merger will spur more takeovers in the industry.

Noble, based near Houston, climbed $3.82 to close at $106.28 on the New York Stock Exchange. Dallas-based Ensco International Inc. closed at $65.90, up $2.64, and Diamond Offshore Drilling Inc. of Houston jumped $4.64 to $113.04. “The drillers have had a tremendous boom the last several quarters,” said Scott Keller, president of New York-based Dealanalytics.com, which provides data to institutional investors. “Behemoths like Transocean are trying to fill in niches in their portfolios.”

An index of drilling companies that includes Noble and Ensco rose as much as 4.7 per cent, the biggest gain in 13 months. The gain by Noble boosted the company’s market value by more than $450-million (U.S.) in one morning.

Companies are seeking bigger fleets to capture rising rig rents from oil companies including Exxon Mobil Corp. and Royal Dutch Shell PLC, analysts said. Oil companies are paying more than $500,000 a day to rent drillships and floating rigs that can reach petroleum reserves five miles beneath the ocean floor.

 The five-member Standard & Poor’s 500 Oil & Gas Drilling Index jumped 39 per cent in the past six months, the second-best performer among energy industry groups in the broader index. Oil field-services companies were the only energy group to do better, posting a 45-per-cent increase during that period.

http://www.theglobeandmail.com/servlet/story/LAC.20070724.IBRIGSSIDE24/TPStory/Business
 
 

 

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