Oil & Gas Drilling & Exploration Stocks Face Uncertain Road Ahead

Offshore drilling companies in the Gulf of Mexico are facing a tough time following the BP oil spill, with companies like Diamond Offshore Drilling Inc. and Ensco International Inc. moving their deepwater rigs to other areas or parking them as they wait for the moratorium to be lifted. However, even when the moratorium is lifted, stricter rules, more stringent inspections, and hefty fines could make it challenging for companies to post a profit. A recent fire on a shallow water platform has further raised safety concerns, potentially extending the ban on drilling in over 500 feet of water.

Key Takeaways:

• The BP oil spill has significantly impacted the offshore drilling industry in the Gulf of Mexico, with companies like Diamond Offshore Drilling Inc. and Ensco International Inc. being forced to move their deepwater rigs to other areas or park them.
• The moratorium currently covers drilling in over 500 feet of water, but a recent fire on a shallow water platform has raised safety concerns, potentially extending the ban.
• Stricter rules, more stringent inspections, and hefty fines could make it challenging for offshore drilling companies to succeed financially even after the moratorium is lifted.
• Companies that have moved their operations to other deepwater areas, such as Brazil, seem to be better positioned to post a profit.
• A backlog of permit applications has forced some companies to move out of the Gulf, further highlighting the difficulties in the industry.

Statistics:

• The moratorium currently covers drilling in over 500 feet of water.
• A recent fire on a shallow water platform has raised safety concerns, potentially extending the ban on drilling in over 500 feet of water.
• Stricter rules and more stringent inspections could result in hefty fines for violations.
• Offshore drilling companies are facing a backlog of permit applications, with some companies forced to move out of the Gulf.