Today’s Research Reports on Stocks to Watch Seadrill and Transocean

Seadrill and Transocean are companies whose commitment to offshore oil and natural gas drilling is not paying off as expected. The failure of requests for new drilling to materialize has unsettled both companies’ stock prices. The oil industry was seeing oil prices approach $50 a barrel earlier in the year, BUT Saudi Arabia announced it will be raising is production levels to 10 million barrels per day, resulting in oil prices taking a step backward. Seadrill and Transocean may be just two example of the impact of low energy prices that have been advantageous for consumers.  

RDI Initiates Coverage:

Seadrill Ltd               

Transocean Ltd.      

Seadrill closed down 4 cents a share on Friday, at a price of $1.49 a share. This stock price is in the stages of a continued decline as it indicated in its shareholder report that the company’s attempts at financial restructuring are continuing, but that in the event such restructuring is not possible, the company has “contingency plans, including potential schemes of arrangement or chapter 11 proceedings.” In other words, bankruptcy is a definite possibility. The skinny is that while short term debt has been competently handled by management, the long term debt can be crushing. The company engages in drilling offshore oil rigs and currently has 1.4 billion in cash reserves, enough for it to operate until the end of the current year. But those long term debts loom large and will require generous debtors to continue to extend the payments on the loans, as the company still has nearly $3.4 billion of debt due starting from April 30th, and an additional it lost $2 billion in future revenues thanks to expiring contracts. Connected with that long term debt is a young fleet of tankers that is a competitive advantage – if it can find willing customers to hire them.  

Access RDI’s Seadrill Research Report at:

Transocean stock dropped 6 cents a share of Friday to close at $12.47. The company is an international provider of offshore contract oil and gas well drilling services. The problem for Transocean and many offshore drilling comp[anise is that its revenues are being affected by companies that have shifted their focus to shale drilling, which, like offshore drilling, was once thought to be environmentally hazardous. The demand for oil rigs has dropped by more than half since the bottom fell out of the oil market in 2015. When the price of oil began to recover, the demand for offshore rigs did not. When the price of Transocean stock began to recover in late 2016, from $9.79 a share, the stock turned positive. But its recent decline will have to level off if the company expects to avoid falling below that 6 month low. Transocean has reported a net income of $2.1 a share from revenue of $4.16 billion for year 2016.

Access RDI’s Transocean Research Report at:

Our Actionable Research on Seadrill Ltd. (NYSE:SDRL) and Transocean Ltd. (NYSE:RIG) can be downloaded free of charge at Research Driven Investing.

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Disclaimer: This article is written by an independent contributor of and reviewed by Hemal K. Gandhi, a CFA® charter holder. is neither a registered broker dealer nor a registered investment advisor. For more information please read our full disclaimer at


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