Noble Corporation (NE) & Transocean LTD (RIG): Don’t Miss Out on These Oil & Gas Drilling Companies

Focusing on the North Sea

Transocean LTD (NYSE:RIG) is the largest contractor of offshore drills in the world. In 2010, border issues between Norway and Russia were resolved, and a treaty was signed to allow oil and gas exploration in the Barents Sea.

Mapping and assessment completed by Norway estimates undiscovered oil in the region to be as high as 8 billion barrels of oil equivalent, up 31% from its previous estimate. The company operates seven rigs in this region and will benefit from the higher oil estimates. Additionally, Transocean LTD (NYSE:RIG) has a contract with Norwegian company, Statoil ASA(ADR) (NYSE:STO), which is planning increases in regional oil production. Due to these beneficial factors, the company’s revenue will increase to $11.04 billion this year, in comparison to around $9.6 billion in the previous year.

In addition to Barents Sea activity, Transocean LTD (NYSE:RIG) is also focusing on the North Sea, as this region accounts for around 12% of the total oil production from mobile offshore rigs. . Weather in this region remains challenging throughout the year and requires the latest technology to drill; Transocean LTD (NYSE:RIG) has the expertise for drilling despite the challenges. Out of total 82 rigs, the company operates around 15 rigs here and considers it to be the second-most important region.

In the North Sea, six harsh-environment floaters operate with a day rate of around $470,000 each. Seven midwater floaters and two jackup rigs are also operating in this region, at a day rate of $300,000. Due the large footprint the company enjoys in the North Sea, it is expected that the inflow of revenue will continue.

Conclusion:

Transocean LTD (NYSE:RIG) will reap the benefits of its advanced technology for extreme climates. The company’s focus on Norway and North Sea will improve the revenue in upcoming years.

Noble Corporation (NYSE:NE) will benefit from production increases in the U.S. and Brazil, driving higher profits for the company.

New contracts for Diamond Offshore Drilling, Inc. (NYSE:DO) will increase revenue, and the company’s spending in technology and projects will result in long term gains.

Therefore, a buy is recommended for all three stocks.

The article Don’t Miss Out on These Oil & Gas Drilling Companies originally appeared on Fool.com.

Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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