Why? People still believe there is plenty of opportunities out there, where?
http://www.fool.com/investing/general/20...-to-p.aspx
In the 70s when the world 1st experience a major oil crisis, any one and everybody wants to build rigs, in fact the beginning of an offshore oil boom. Marathon Oil wasnt Marathon, it was a rig designer moth into a rig builder and the later part an Oil Co.
Why be at the bottom of the food chain when it can obviously move up the value chain. The Marathon jack-up was the industry standard. It still is the standard in efficient design and very price competitive - its like Apple and never goes out of fashion to people using the Marathon rig!
The booming cycle after the oil crisis lasted so long, that too much speculative new built went bust.
Why would this time be any different when the built cost were so high and energy price just keep dropping.
Some 1 said shale oil is not cheap, so is tar sand, but for every generalization, some where out there, there are capax that were already sunk and the oil/gas flow is a huge gusher that continue to be pumped out of the ground at highly lucrative price. So why wouldn't the Co. pump it out to spent on capax. Its a commodity and not that difficult to forecast.
What is difficult now is those mountain of debt to be paid with lower charting rate and the maths is pretty tricky with oil dropping by the second.
There is no rescue from Central bankers if oil deflate further as it means the central bank is happier to increase interest rate sooner which will only add to the pain of risky rig speculators.
I see yesterday temporary push up.... and sadly it close down instead and the pain will just keep coming for the most ardent fund holding it for dividend yield.
The most clear idea is get out now while the big volume selling is keeping it up.... it will be too late once news of impending rig default comes knocking.
I have my doubt this time it will be any different after such a prolong rally in rig cycle. At some point, everything will revert to normal. That is why the oil Co. never own any asset unless its a sure producing 1.
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