This is great, especially the market section! I've been holding Valaris throughout the correction in the second half of the year, and I bought some more recently. Imho, this was a huge overreaction.
Diamond hands! :D A 50% decline in stock prices, based ona few lower-priced contracts and Brent crude dropping to around $70/bbl, also doesn’t make sense to us. This just looks like a good buying opportunity.
Overall, the market seems to misunderstand the relationship between the demand and oil prices. At $70/bbl, companies like Valaris and can easily secure contracts. In fact, 93% of reserves would be profitable at this price point. Even if we factor in a $10/bbl markup needed to start drilling, it would mean that 84% of reserves are viable. The real negative impact on offshore demand begins when prices fall below $55-$60/bbl, which seems quite unlikely given the current macro.
This is great, especially the market section! I've been holding Valaris throughout the correction in the second half of the year, and I bought some more recently. Imho, this was a huge overreaction.
Diamond hands! :D A 50% decline in stock prices, based ona few lower-priced contracts and Brent crude dropping to around $70/bbl, also doesn’t make sense to us. This just looks like a good buying opportunity.
Overall, the market seems to misunderstand the relationship between the demand and oil prices. At $70/bbl, companies like Valaris and can easily secure contracts. In fact, 93% of reserves would be profitable at this price point. Even if we factor in a $10/bbl markup needed to start drilling, it would mean that 84% of reserves are viable. The real negative impact on offshore demand begins when prices fall below $55-$60/bbl, which seems quite unlikely given the current macro.