Today, both semisubmersible rigs and drillships — the two types of rigs capable of accessing these deep formations, have utilization rates well above 80% and 10% higher than every other type of offshore drilling equipment. In addition, with a major uptick in exploration in offshore Brazil expected after the Pre-Salt auction near the end of this year, ultra-deepwater assets will be in high demand.
Source: Wikimedia Commons.
Of companies out there that are traded on the U.S. exchanges, Seadrill Ltd (NYSE:SDRL) is setting itself apart from the others, as it plans to build 14 new ultra-deepwater capable rigs between now and 2016. Not only will this move expand its ultra-deepwater fleet by 44%, but it also puts more rigs under construction than three of its main competitors — ENSCO PLC (NYSE:ESV), Diamond Offshore Drilling Inc (NYSE:DO), and Transocean LTD (NYSE:RIG) — combined. With day rates for these rigs averaging $450,000, an addition of 14 rigs could potentially increase the company’s current annual revenue by 50%.
Getting it right
The biggest Achilles’ heel of ultra-deepwater drilling is costs. Not only do the rigs to drill cost $450,000 a day, but nearly every aspect associated with oil and gas exploration also gets more expensive as water depth gets greater. So the margin of error for exploration and production development needs to be minimized as much as possible. A perfect example is Royal Dutch Shell plc (ADR) (NYSE:RDS.A), which has so far spent $5 billion on exploration in the Chukchi Sea of Alaska without producing a commercial barrel of oil so far.
That’s where Core Laboratories N.V. (NYSE:CLB) comes into play. The company provides a wide array of services designed to increase recovery rates, optimize hydraulic fracturing techniques, and help target the most lucrative areas of a reservoir. The company is currently working with operators in the Gulf of Mexico to increase ultimate recovery rates from the single digits to 20% through new, enhanced oil recovery techniques that could prove incredibly valuable in all of the golden triangle regions.
This past quarter was the third straight in which Core Laboratories N.V. (NYSE:CLB) posted record revenue, net income, and earnings per share. With integrated majors all teaming up to work with Core Laboratories N.V. (NYSE:CLB) to implement its innovative technologies and analysis (yes, Petrobras is one of its clients), the chances that this oil stock will post more record-breaking quarters is very possible.
What a Fool believes
These three oil fields have the potential to be major driving forces in global oil production for years to come, and these three companies are extremely well positioned to take advantage of this coming boom. To keep me honest, I have given an “outperform” rating on all three of the oil stocks in our CAPS community.
The article 3 Glistening Oil Stocks From the “Golden Triangle” originally appeared on Fool.com is written by Tyler Crowe.
Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter, @TylerCroweFool. The Motley Fool recommends Petroras and Seadrill and owns shares of Seadrill.
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