Tuesday, August 31, 2010

A Primer On Offshore Drilling

Offshore drilling is a simple concept, but a very difficult business. With much of the easily accessible on-shore oil and gas reserves already under development, energy companies have increasingly looked offshore to replenish their reserves and fulfill their production needs. Although there is ample oil and gas waiting below the seabed, it is not so easy to access. Operating under the water is a bit like operating in space – it is hostile to man and machine and requires specialized equipment and know-how. 

The offshore drilling industry is a multi-billion dollar per year enterprise. While leading players like Transocean (NYSE:RIG), Diamond Offshore (NYSE:DO), Ensco (NYSE:ESV) and Noble (NYSE:NE) represent a significant percentage of the operating rigs, there are dozens of smaller players throughout the world and the market capitalization of the publicly-traded companies in the sector exceeds $50 billion. (Before jumping into this sector, learn how these companies make their money in Oil And Gas Industry Primer.)


To read the full piece, please go to:
http://www.investopedia.com/articles/fundamental-analysis/10/a-primer-on-offshore-drilling.asp

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