Bassoe: The hunt for offshore rig deals continues

Less than ten years ago, new-entrant rig startups could contract multiple rigs at yards in Singapore and China and raise money with little difficulty. Today’s private equity and institutional investors, however, are looking for promoters who know how to operate offshore rigs, have been successful before, and are willing to put their own money into the deal.

While equity in many of the major offshore drilling contractors can be acquired relatively cheaply, most owners have been in cash conservation mode (focusing their spending on properly maintaining the rigs they have – one would hope) or broke and struggling through financial restructurings due to overleverage. There are still a lot of companies with “baggage” out there, and investors want a clean slate with the prospect for higher upside.

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