Filed under: Commodities, Oil, Stocks to Buy

Despite the oil market’s recent correction / minor pullback, oil remains at an elevated price, and the outlook for the oil and oil services sector remains solid.

And one oil service company worth an evaluation is Diamond Offshore (NYSE: DO).

Diamond is a contract driller of offshore oil and gas wells, with a concentration in deepwater drilling. The company has a strong fleet of floater rigs: dayrates for these rigs will continue to increase at double-digit rates, a market condition that reflects their increased value stemming from higher energy prices, and some pricing power for DO.

Further, Diamond has an impressive geographical footprint (rigs operating in the Gulf of Mexico, North Sea, South America, Africa, Australia, and Southeast Asia) and superior client diversification (51 customers). The Reuters F2007/F2008 EPS consensus estimates for DO are $6.75/$11.89.

Continue reading Diamond Offshore has precious equipment

Permalink | Email this | Comments

Share This

This entry was posted on Friday, November 30th, 2007 at 4:14 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.