The Contrarian Way To Play Crashing Oil Prices
Oil prices have fallen sharply over the past few weeks, dropping 13 percent since the Thanksgiving Day OPEC announcement of no production cuts.
Shares of oil-related stocks, however, have dropped even further in that time frame. Shares of Ocean Rig UDW Inc (NASDAQ: ORIG), an offshore drilling contractor, have lost more than 27 percent in the same period, falling from 13 to a new low of 9.45.
Ocean Rig has the fifth largest ultra-deep water fleet, fourth largest drill water, purest ultra-deep water and one of the youngest fleets in the deep water arena, according to the company website.
Other key highlights from the recent earnings presentation:
- Achieved 98.6 percent average fleet wide operating performance for the third quarter
- Awarded three-year contract extension by Petrobras for Ocean Rig Corcovado (Q2 2015 through Q2 2018)
- Awarded three-year contract extension by Petrobras for Ocean Rig Mykonos (Q1 2015 through Q1 2018)
- Declared dividend of $0.19 per share with respect to Q3 2014 operations, to shareholders on record as of October 31 and payable on November 11, 2014
Investors looking for a contrarian play in oil may want to consider stocks like Ocean Rig as a comparatively attractive way to position for a rebound in the price of oil.
Image credit: Ralf Roletschek, Flickr
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