The WorkBoat Composite Index was only off about 10 points in November, but that masked the big story. After treading water in October, operators lost 58 points, or 13%, in November.
The Philadelphia Oil Service Sector Index also lost 13% in November and dropped another 9.5% through Dec. 12. The big percentage losers for the month were all drillers, including Transocean, which lost 30%.
At the Cowen and Company Fourth Annual Ultimate Energy Conference held in New York in December, Steven L. Newman, president and CEO of Transocean, was asked about falling oil prices and its effect on rig counts.
He said the global rig count, at best, will be flat in 2015. “We expect 2015 to be every bit as tough if not more difficult than 2014. The rig count in the Gulf of Mexico is likely to go up and rig counts in some other areas of the world is going to have to go down to compensate for that.”
In Transocean’s third quarter earnings call, Newman said the company was still bullish. “As you know, the most effective cure for a low oil price is a low oil price, and we maintain that our customers’ obligation to replace reserves and grow production will inevitably drive a return to drilling. It is in this context that our long-term bullish view of offshore drilling remains intact, underpinned by our fundamental belief in the long-term growth of energy demand and the key role that offshore hydrocarbons will play in meeting that demand. The industry has been through these downturns before, and Transocean is well positioned to manage through this one.”— David Krapf
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