Separating the Offshore Wheat From the Chaff: Diamond Offshore Drilling, Inc. (DO)

The rig still needs to undergo upgrades after it comes off of its current contract in Southeast Asia. The company will be spending $120 million to upgrade and modernize the rig before it begins operations in the North Sea in the second quarter of 2014. The company was able to secure a three-year contract worth nearly $439 million. Signing a long-term contract at an attractive rate with a world-class operator is something for Diamond Offshore investors to cheer.

The turbulent seas can be both friend and foe to deepwater operations. While this past year wasn’t exactly kind to Diamond Offshore, it wasn’t a total washout for the company. Its future looks solid as it’s beginning to see some more visibility into 2014 and beyond. This is good news for investors, even if 2012 wasn’t a year for the record books.

The article Separating the Offshore Wheat From the Chaff originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Halliburton and National Oilwell Varco.

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