Deepwater Market Divide Is an Opportunity for Atwood Oceanics, Inc.
In the middle of rehashing the same short-term weakness story in the deepwater drilling sector, Atwood Oceanics (NYSE: ATW ) actually admitted that the weakness in the market was only impacting the old rigs. The company, while being cautious the whole earnings conference call, actually admitted that the bifurcation in the market is an opportunity and not a threat.
The call started with the general theme of the Noble Corp. (NYSE: NE ) report calling for a pause that would refresh the market. Atwood Oceanics discussed slowing demand, which would hamper old rigs that might be cold stacked eventually. Atwood Oceanics hasn't actually seen any slack in demand for the high-specification rigs it is building. The report generally backs the ongoing theme of SeaDrill (NYSE: SDRL ) that new deepwater rigs will continue to command strong prices through at least 2020.
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