In this week’s episode of Industry Focus: Energy, host Nick Sciple, together with Jason Hall and Tyler Crowe, explain how offshore companies work, where the industry is today, and what investors should watch with these companies. Tune in to learn what sets Transocean(NYSE:RIG), Diamond Offshore (NYSE:DO), Seadrill (NYSE:SDRL), and Ensco(NYSE:ESV) apart from each other, what kind of risk/reward profile each company has to offer, some critical points and trends investors need to know before diving into offshore, and much more.
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A full transcript follows the video.
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This video was recorded on Oct. 4, 2018.
Nick Sciple: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. Today is Thursday, Oct. 4, and we’re discussing offshore drillers. I’m your host, Nick Sciple, and today I’m joined in studio by Motley Fool contributors Jason Hall and Tyler Crowe. Jason and Tyler are here today for the fool.com writers’ conference. How about y’all talk about how y’all got here for the show? I know Jason’s from out in California. Tyler came a little bit further. You want to talk about that?
INDUSTRY FOCUS // Energy // 10-04-2018
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Jason Hall: Just a little further.
Tyler Crowe: Just a little bit further. Yeah, I live in Malawi, which is in South Central Africa. About a 30-hour flight. It was a long trajectory to get here.
Sciple: A little nap on the plane, maybe a little a little neck pillow, get you all situated, ready to go?
Crowe: Lots of movies. I catch up on a lot of movies when I’m on the flight.
Sciple: I’m glad to have both of y’all in the studio with us today talking about offshore drillers. First off the top for investors, listeners, what exactly is offshore drilling? What do the companies do? What are the services they provide? Who are their clients?
Hall: It’s a really interesting industry. The oil and gas industry is filled with specialized companies that focus on certain things. These are the companies that are contracted by oil producers, whether it’s a nationalized oil producer, one of the large international oil majors, or a small independent, that actually do the drilling and they do the exploration work. Within the offshore, there’s different parts of it. You have more of the traditional shallow water work, which is a lot of jack-up rigs, where the rigs actually sit on the surface of the sea, and then they drill underneath.
Probably the biggest growing part, and where most of the development is going to be in the future, is in floaters. There are two groups of these floating vessels. You have semi-submersibles, which are able to submerse part of the rig. Then you have the true floating drillships. These vessels are capable of drilling in much deeper water. They’re generally capable of drilling much deeper under the surface to get to where the oil and gas resources are.
Crowe: It’s very much a fit sort of thing. When you have a drillship, you’re going to be in a little bit deeper waters, probably in better water conditions vs. like a semi-submersible, which is really good for harsher environment places, like, say, like off the coast of Norway, where you have very high seas, Arctic conditions, things like that. They’re built to fit based on of where in the ocean they are.
Sciple: Right. Can investors think of these players as more, we talked about oilfield servicers a couple of weeks ago with Jason, as more oilfield servicers specialized for the offshore? Is that a good way to think about it?
Crowe: Yeah, absolutely. It’s hyper-specialized, too. You have your major diversified oil services companies, like a Halliburton or a Schlumberger, who are actually going to do some of the typical services that they do on-shore, as well. The oil rig drillers, the companies we’re talking about specifically here, are ones that own the rigs themselves and lease them out to the companies. They’re very similar to an equipment rental company, except you’re renting something that’s $500 million and it lasts for three years.
Hall: And that rental, generally, also comes with trained staff that runs the rigs and that sort of thing. So you’re also renting the reputation and the capability of that particular company and their skill set in a certain area or type of operation, like rough seas, that kind of thing.
Sciple: Right. OK, yeah. So that’s a good introduction to the space. Let’s talk about offshore drilling has had a little bit of a pullback over the past few years, like everything in oil, like we’ve discussed. There’s really been a pullback in demand. Rig daily leases back before the downturn, somewhere in the range of $800,000 a day, that day rate for these rigs. Now they’re closer to the $200,000 range. Can you talk about how this space has moved since the downturn, and where we’re sitting today?
Hall: Tyler, I think you can probably offer a little more color, but I don’t think it’s a stretch to say that this has probably been the hardest-hit sector, and definitely the longest in terms of the downturn. A lot of the sectors are starting to bounce back. This is the one that’s absolutely taking the longest, and it’s been the most beaten down.
Crowe: Yeah, one of the things that made it so challenging during this downturn for offshore is the long-term capital commitment that it takes to build an offshore rig. Let’s wind the clock back to 2014. Offshore oil is going bonkers. It was $110. Everybody wanted to spend on it big. In retrospect, kind of questionable prospects. Places like the Arctic, things like that, because we thought we were going to have high oil for a very long time. Then, as the money went away, a lot of oil companies that were the producers, still needed to produce oil, but they didn’t want to tie up capital for that long. They weren’t sure where oil was going. So, they started going into the short-cycle stuff that we saw. Moving into shale, maybe trying to juice a little bit more from your existing sources so you didn’t have to spend money.
That’s why the downturn has lasted so long and so severely. It’s one of those last-barrel-added parts of the industry. That’s why we’re seeing it takes so long to recover in relation to everyone else.
Sciple: Right. Just the amount of capital expenditure you have to have to put these wells out in open ocean and transport it around, it can get pretty expensive. Like you said, back in 2014, we were seeing breakeven prices on these wells at up to $80 a barrel. Today, we’re excited that oil has barely cracked $80 on the Brent measure of oil prices. Forbes quoted that a trillion dollars in projects were cancelled between 2014 and this year. There’s definitely been a significant pullback.
With that, as well, this is maybe the first industry to get hit when oil starts going downhill, and it’s going to be one of the last ones to start moving when oil starts bouncing back. We’re seeing a little bit of signs there. We’ve seen an uptrend in final investment decisions over the past few years. Well tendering activity is increasing. We reached the cyclical bottom in Q2 2016, and it’s been trending up, as far as the floaters under contract. We’re really seeing signs of more of an upturn.
Looking out over the next 18 months, are y’all expecting that to continue? What’s your expectation, given the current oil price environment where things are moving today?
Crowe: Every single bad experience has something good that comes out of it. One of the good things that came out of this as a result was the fact that the industry got better at what they did and brought down their costs significantly. We could call, 2014-2016 was basically an industry spanking for spending too much money. Offshore was one of the guilty suspects. Companies were spending money on basically made-to-fit for every single well that they drilled. Everything was a unique design. Every single build was unique. And the costs were really high. Because of this, they standardized a lot of things. The breakeven costs have gone down. So, on top of the increase in the price of oil, the cost for it has gone down significantly enough that it makes it more viable to do it. If you look at the international oil companies nowadays, they’re looking at offshore prospects in places like West Africa, Brazil, and South America, where your breakeven costs are getting much more in line with things like shale nowadays. It’s $40-%50 versus the $80-$90 that we saw four or five years ago. That’s certainly spurring a lot of that turnaround that you were talking about.
Hall: I think one of the key things to remember is that offshore oil, in terms of the cash production cost, is competitive with most other resources in the world. The issue is the upfront expense, and it’s the time that it takes to develop. Earlier, Tyler was talking about the quick-turn stuff that’s made shale so exciting and is going to continue to drive investment into shale, probably for the long term. It can be so quickly brought online and start producing cash.
But I think we’re at a point now, because the industry is so much healthier, that you’re going to start to continue to see more of these final investing decisions. The dollar numbers are going to continue to get bigger, because the cash flows are coming in from these other sources that are going to allow, especially the larger companies, to invest offshore as part of their long-term play. I know ExxonMobil, that’s a really big part of their strategy.
Crowe: Certainly, ExxonMobil is looking into some very exciting things that they have going on in certain parts of the world. But it’s not just them. In the most recent investment and marketing pitch from Transocean, they were saying that there’s about 57 projects that they expect a final investment decision over the next 18 months, worth 87 rig years, which is basically like, everything is broken down into day rates for rigs. That’s 87 times 365, how many total days that are going to be available. There’s a lot of work coming on in the next 18 months, which should be a good sign, a much healthier sign, for the industry.
Sciple: Right. The last thing I want to talk about, we’re going to mention Transocean and some companies on the back end of the show, is that offshore production really has to increase in the coming months and years. We’ve seen, earlier this decade, replacement rates, as far as recontracting these rigs, were up over 100%. Now, it’s down in the low 30s. Of the rigs that are coming offline, only about a third of that production is getting replaced year over year.
When offshore is a third of global oil production, this is a significant sign that investment needs to come in place to replace that production. Otherwise, oil prices are going to continue to rise as there is a shortage; and as oil prices rise, that’s only going to make these investments in offshore more compelling. If there’s not any investment in this space… it’s going to have to happen sooner or later. The economics will only become more appealing.
Crowe: Another part of the challenge, too, and to a certain extent we’ve seen it, tight oil has replaced a lot of what has been lost in offshore in just the decline curve. I think the big thing with the Permian right now is, we’re basically at capacity. They just can’t take out any more oil with the existing infrastructure. That’s another bigger issue is that. Sure, you can continue to drill. You can continue to develop. But you have to have infrastructure in place. And that infrastructure takes years to bring online. Even if you can bring a well online in a few weeks now, if there’s no infrastructure to get the oil out, it doesn’t matter.
I think that’s one of the things that’s pushing, that’s going to drive more investment back into offshore. There’s infrastructure there that can take that oil out.
Sciple: Yeah, and that timeline advantage of shale is going downhill as the infrastructure becomes tighter.
Talking about some of these offshore players, we mentioned in the first half of the show, there’s been a downturn. Almost every player is down 60%-70% over the past five years.
Crowe: That’s it? [laughs]
Sciple: Yeah, only 60%-70%. And some of these companies, I mean, Transocean is up 30% year to date. They’ve really suffered over the past few years. We’ve talked about the downturn, all those sorts of things.
Let’s talk about some of these companies. Let’s see if there’s a chance for them to bounce back.
Hall: Before we do that, there’s some extra context that’s important. These are the ones that are still around, these are the ones that are still going interest. There are a lot of others, especially smaller ones, that are they don’t exist anymore, that have been acquired or their assets have been acquired. These are the ones that are still here.
Sciple: That’s a good transition to go into Transocean, which just recently this month acquired another offshore player, Ocean Rig. You want to talk about that merger and what it’s done for Transocean, how it’s helped their competitive position?
Hall: It’s interesting. Ocean Rig, very small player, really specialized in the deepest water vessels, but had zero backlog. It was really a great opportunity to acquire some really high-quality assets, almost, I don’t want to say for a song, but it was a great situation.
I think the bigger thing is, Transocean has been so amazing over the downturn. I think the parallel for me has been Nucor, the big steelmaker that has been able to leverage downturns and make really strong acquisitions at bargain-basement prices. It’s going to be positioned so well coming out of the downturn, to really be the behemoth in the industry.
Crowe: I actually found Transocean quite fascinating. Heading into the downturn, they actually looked kind of questionable.
Hall: It was terrible, scary. Their debt load was enormous.
Crowe: They had a lot of cash on the books, but they had a really high debt load. And if you looked at their fleet of rigs at the time, it was old, it wasn’t very capable. They did look questionable. Right around 2015, maybe a little earlier, they brought in a new CEO, Jeremy Thigpen, from National Oilwell Varco. And he basically, I don’t want to say gutted the company, but really ripped off the Band-Aid. He took a lot of the old, unusable, they’re not going to be able to market well, equipment, and just scrapped it and said, “We’re not going to use these, so let’s use this now, rip off the Band-Aid, keep our debt manageable. Don’t spend more than we have to on managing these sorts of things.” And it has paid off in a major way. And they have been one of the ones that can actually consolidate the industry right now, while things are still cheap. But everyone is starting to look like it’s getting better.
Sciple: Right. And you mentioned taking these rigs off the market, deactivating these rigs. You also mentioned the valuation on these companies. I think that ties into something really significant with these companies you see with Transocean, you see with all the players — that tangible book value. Transocean right now is trading at 0.55 times its tangible book value. At first glance, it’s incredible. This thing, if you were to sell it off for its parts, would be worth double than what’s trading for in the market today.
But there’s a little bit hiding behind there. You talked about some of the writedowns they’ve taken on their rigs. Do you want to talk about how to contextualize this book value in the context of, there are going to be some more rigs getting written down? Since the start of the downturn, Transocean has written off 43 of their rigs. That’s continuing a little bit. Do you think that’s at the bottom?
Crowe: I think we’re starting to see the tail end of it. I mean, these guys took the machete to their fleet early and often. Granted, Transocean wasn’t the only one. Ensco did a very good job of it. Noble Corp., as well. Diamond Offshore was actually in a position where they didn’t have to because they already had a decent fleet already. But, in doing so, because the industry is starting to pick up, and because of the assets they have on their books today, we could still see some write downs, but I don’t think we’re going to see the $2 [billion to] $5 billion writedowns that we saw, it seemed like clockwork in the second quarter of every year over the past few years. With those out of the way, we might see a few here and there, but certainly, from that valuation standpoint of that low tangible book, I don’t see a point where they’re going to be cutting the tangible book value of their business by half again to make that valuation seem suspectly low.
Sciple: Yeah, and so when we normalize the valuations of these assets, you fully expect that we will still see this business trading below its real market book value.
Crowe: At least for this time being, I think.
Hall: Yeah, I think, my thesis is, I’ve invested relatively heavily in a number of offshore drillers. As I typically do, I get really excited, I’m optimistic and I go in early. I did go in a little bit early. But we’ve already seen, over the past year, some recovery in stock prices as a lot of the cutting has been done, and the operating costs stabilized. The reality is, even if you cold-stack a rig, you’re still paying some operating expense to keep it there. Scrapping, getting them completely off the books, is an operating cost benefit, as well.
Again, I think we’re kind of at that point now, where the businesses are what they are. The reality is, we’re going to see probably a year, a year and a half, where things are probably going to look somewhat similar to the way they are. Even as these new contracts come online, and even though they’ve cleaned up the fleets and they’ve scrapped what they’re going to scrap, these guys still have a ton of rigs that aren’t working. So, even as they’re bringing rigs online, it’s not necessarily going to add a substantial amount of earnings per share, cash flow per share, value at this point. It’s just going to balance out some of their operating expenses.
Crowe: I like to think of it like, because everything is a negotiated contract, who has the pricing power right now? And if you think about it in that way, the producers have the pricing, the negotiating power right now, as long as there’s a lot of available rigs. We saw it in shale probably 18 months ago, two years ago.
Hall: Oh, yeah, there were so many land rigs.
Crowe: There was an excess amount of equipment, which meant that companies were willing to take a steep discount just to keep things working and bring some cash in the door. I think we’re going to see the same thing with offshore for a while. You might not get great contracts because producers have the pricing power. But at the same time, you’re going to see an uptick in revenue, you might start to see some breakeven into profitability again. But you’re certainly not going to see the gangbuster profit margins that we saw five, six years ago.
Sciple: Right. And today, we’re looking at maybe 60% utilization rate for these offshore rigs, versus five years ago, as you mentioned, we were looking at 90%-plus. When the market gets that tight, the pricing power shifts —
Hall: Shifts back to the offshore rig owners again.
Sciple: Correct. Right now, that shift has not taken place. But the way we’re seeing the market play out, there is a good chance that that shift could take place and really start driving profits for these guys.
Any last things on Transocean before we transition to any of the other players? Anything you want to call out?
Hall: I think the interesting thing about Transocean is, it’s not just that it’s going to be the dominant behemoth in terms of its total size. I think there’s value there. Again, half of book value. It’s going to probably continue to trade at a discount to book value for a while. But I think if you’re patient and you’re willing to invest and ride out whatever happens, even starting a position now, as the market tightens and day rates come back up, and the valuation starts to normalize, there’s a tremendous amount of upside, if you can just ride out that volatility.
Crowe: The only other thing I would say about Transocean specifically is, watching them over the past five years, you have to really consider management and how they’ve been able to handle the downturn, and how they’re going to handle the upturn. If you’ve watched what Transocean has done over the past five years, it would be hard to argue who has handled probably a less favorable situation going in and putting themselves in a good position coming out.
Sciple: Let’s swing and now into Ensco, which is another company trading 0.44 times its tangible book, another company just made an acquisition, Atwood Oceanics. Let’s give an overview on this business. What makes it different from Transocean? There’s going to be a lot of similarities, but what makes it stand apart on its own?
Hall: I think the first thing that’s different is, it’s much smaller. It has a much smaller backlog of work. On one hand, that creates additional risk. The nice thing about a backlog of work is, you have contracted revenue that’s coming in, so there’s some predictability. But the thing that makes Ensco really interesting from an investing perspective is, you’ve got some similarities, in terms of management that’s been really nimble. But the way that they’re playing the market, I think, is what I really like. I think in general, now is the time that it works. You talk about day rates having come down so much. A substantial portion of that was really struggling contractors that were taking revenue however they could get it. The people that are left, the companies that are left, the people making those decisions, are a hell of a lot more disciplined. I think that you’re going to see day rates continue to creep back up because there’s a lot less of just taking whatever revenue they can get.
So, even though there’s still an oversupply, and, yeah, the producers definitely have the leverage, the producers that are here — Ensco’s CEO on the latest earnings call said flatly that they have no interest in signing long-term deals at current rates. Like a third of their active vessels are not under contract. But, they have a lot of liquidity, so they can ride it out. They’re in a position where they can take these one well, two well deals, bridge the gap, tap their liquidity if they need to. And then, as the market tightens, then they can start signing these long-term contracts at higher day rates. It’s going to take a couple of years for that to play out.
The thing that I like about Ensco is, they have a great fleet, they have some really, really high-quality vessels, and they have the liquidity to ride things out. From a valuation perspective, it’s 42%-43% of book value. There’s even more potential upside there.
Crowe: But there’s more risk, too. I’m going to be the cold-water person on Ensco, just a little bit. I actually agree with a lot of what Jason had to say on this one. The only thing that kind of gives me a slight pause with them is, Transocean is basically deep offshore, floating semi-submersibles only. Ensco has a mixed fleet. Also has shallow water jack-ups. And, it’s a much older fleet. We were talking about writedowns. I wouldn’t be shocked to see with somebody like an Ensco, with these older shallow water assets, possibly being scrapped and seeing some turnover there that may hamper earnings for a little while longer.
They do have some good contracts on that shallow stuff. They work very heavily in the Middle East with Saudi Aramco and things like that. It’s not a super risk right now. But looking down the road, I would not be shocked if we saw some sort of turnover on that that could dampen the returns that you would get in somebody that was a more pure new fleet.
Hall: Yeah, that’s fair. I think it’s also worth pointing out that it’s the least important part of their fleet, in terms of cash generation. That’s a real risk, but I want to make sure nobody overstates the potential risk there.
Sciple: Awesome! Like you said, that backlog is an asset to some businesses in that they have this reliable cash flow. But it also can be an asset not to have that, because when those prices tick up, you have available assets that you can really lock in those prices whenever you do get a backlog, maybe get it at a higher rate.
Hall: It’s like hedges for an oil producer. If your hedges lock in your revenue but they cap your upside, you have to factor that in.
Sciple: Maybe a little more quickly here, we’re kind of running long, let’s talk about Diamond Offshore, another operator in this space. Again, what makes them stand out between the Enscos and the Transoceans that we’ve talked about?
Crowe: Diamond, of all of them, has probably done the best job during the downturn. They actually had a very, very small fleet, but it’s a very highly capable fleet, and something that is pretty well contracted already. They’re like the exact opposite of Ensco in the sense that everything’s relatively well-contracted for a long time. So, you’re going to get a good return now, but it’s capped, vs. something like Ensco, where you’re going to have a higher upside. At least on that end, I think it’s probably the safest bet to do fine. But you’re not going to see, probably, something as a higher return later on.
Sciple: You’re looking for the floor, you buy Diamond Offshore. You’re looking for the ceiling, you buy Ensco. You’re looking for a little bit of diversification, maybe look at Transocean. It’s really all kinds of different risk appetites that investors might be looking for.
We were pretty quick on Diamond Offshore, but I think listeners will understand what’s going on there. Let’s go to Seadrill, probably the most interesting of these companies.
Crowe: I don’t think either of us can be very fair with Seadrill, because I think we both lost a lot of money on Seadrill. Anybody that’s invested in Seadrill a few years ago, and I know both him and I did. If anything, this might be emotionally charged.
Hall: The fact that I’m going to brag and say that I sold half of my stock before the company went bankrupt, it’s telling.
Crowe: Yes, very telling.
Sciple: For listeners to get to get some color, Seadrill emerged from bankruptcy back in April. As a result of that, equity shareholders prior to the bankruptcy really got hosed. I think only 2% of the equity post-bankruptcy is in the hands of people who were holding equity prior to bankruptcy. There’s really been a lot of dilution, paying off those creditors with equity. Now that it’s emerged from bankruptcy, do you think it’s in a better position? Have they cleaned up the balance sheet through that Chapter 11 filing? What’s your assessment of the business going forward from here?
Hall: It’s kind of yes and no. The balance sheet’s certainly stronger, they have more cash on the books, which is good. You talk about going back to when there was easy money, everybody was throwing money at offshore. One of the big mistakes that Seadrill made was new builds, just tons and tons of new builds it had on its books. We’re talking $1 [billion to] $1.5 billion a year that it had to put into to get these new builds ready to deliver, and at the same time, paying this insane dividend and essentially using the debt that it was taking on to pay the dividend, so it could use cash flows to pay for these new builds. It compounded everything. You fast forward to where we are today, and it’s still kind of dealing with that. Some of those new builds are still on the books, and it’s got these strange deals to sell them off once they’re finished being built.
I think the fleet’s in good shape. But there’s not a ton of backlog. I don’t say it’s a bigger Ensco without the older vessels, but that’s kind of a good way to think about it. Because of its size and the fact that it still has some new builds coming up, I’m just not sure. I’m interested because it looks cheap. Maybe I’m just jaded.
Crowe: I’m going to say I’m a little bit jaded, too. Everything he said about the fleet is right. I’m actually just going to punt on this one. I feel like this is one I really need to go dig into the financials a lot more.
Hall: Which we finally got, two and a half months after emerging from bankruptcy.
Crowe: Yeah. Once I actually have time to dig into the financials a little bit more, I’ll be able to speak a little bit more clearly on this one. I’m going to punt on that one for now, aside from my anger previously.
Sciple: For the listeners, it’s something to watch, as Jason mentioned, with that newer fleet and less of a backlog. It’s another high-upside play like you’re looking at with Ensco. But you got a whole wrench thrown into that with, they just came out of bankruptcy. Their financials are a little bit wonky now coming out after that. Definitely something to keep an eye on, maybe something to wait and see. See how things play out over the next few months to assess an investment opportunity.
Going away, we spent a lot of time talking about, this industry looks like it’s set up to really have an inflection point, start moving to the upside. What would have to happen to disrupt that thesis?
Hall: I think oil prices collapsing again. You go back to the most recent oil collapse, it was really just a matter of oversupply. That was the big thing that happened. It looks like we have the opposite situation now. You think about offshore and the decline. You think about the capacity issues with growing shale, the biggest shale plays. It’s going to take some time to develop the capacity there. You think about what’s going on with some of the OPEC countries, some of the larger national oil countries. It’s kind of a mess. Iran, we’re about to shut in a lot of oil there.
Crowe: Venezuela, people are leaving the country every single day.
Hall: Yeah. I think the biggest thing that makes offshore different, again, is the fact that these projects take so long to develop —
Crowe: A lot can happen in four years.
Hall: That’s the thing, it’s the time. That’s exactly it, it’s the time. You think about the Permian play and the opportunities there. You can bring a ton of oil on super quick. One quarter to the next, things can look really, really different. Generally to the upside. But in offshore, it can really take a long time. I think, anybody that wants to invest in this industry, you have to be willing to play the longer game. It’s probably going to take another year and a half to two years of tightening of the supply and demand of the vessels, because there’s still a ton of old vessels out there that other companies are operating that need to go away to really put some of the leverage back for pricing to go up. It’s just going to take time.
Sciple: Yeah, I think that’s the bottom line.
Crowe: And the biggest risk is that something changes in four years. We look at it today right now, and everything looks favorable. But three years down the road, could we see a demand response that is unfavorable? Could we see shale take off more than expected? Could we see other shale assets outside of the United States take off? It’s just one of those things where the realm of possibility becomes higher. So, your degree of difficulty of that paying off three to five years just makes it a little bit more challenging, so invest appropriately.
Sciple: Right. I think one thing to point out to investors, the thing that I think about is, these businesses, we’re investing on a valuation basis. These are all value plays. They’ve been beaten down too hard, everybody left them for dead and you’re coming to buy them today. What I’ve seen in my experience as an investor, when you’re investing in value plays, if you feel super comfortable, you’re probably in trouble. OK? You need to feel a little bit uncomfortable when you’re going into these. These companies are no different. Like I said, left for dead, in an industry that, everybody thinks renewables are taking over tomorrow. You really have a chance to have a contrarian play in an industry that really has a chance to move forward.
Any last thoughts before we send it away?
Hall: I think this is an excellent place to look at making multiple investments over a period of time as you observe and watch what’s happening, versus going all in at this point. I think that’s probably the best way most people should consider investing in it.
Crowe: What he said.
Sciple: [laughs] All right, guys. Awesome to have you guys on! Looking forward to the fool.comconference over these next couple of days and having all the writers in town.
For our listeners, as always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don’t buy or sell anything based solely on what you hear. Thanks to Austin Morgan for his work behind the glass. For Jason Hall and Tyler Crowe, I’m Nick Sciple. Thanks for listening and Fool on!
Jason Hall owns shares of Diamond Offshore Drilling, Ensco, Noble, Nucor, and Transocean. Nick Sciple has no position in any of the stocks mentioned. Tyler Crowe owns shares of ExxonMobil, National Oilwell Varco, and Nucor. The Motley Fool owns shares of and recommends National Oilwell Varco. The Motley Fool recommends Nucor. The Motley Fool has a disclosure policy.