This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Transocean, Stock Can Find Success In Kenya Deepwater

Stocks in this article: RIG

NEW YORK ( Trefis) -- East Africa's growing importance in deepwater exploration and production could receive a further boost with oil exploration firms set to drill Kenya's first deepwater oil well in August.

Deepwater activity in the region has grown over the past few years with the discovery of massive gas fields in the Offshore area 1 of Mozambique.

However, with companies set to strike oil in offshore Kenya, exploration could pick up further as companies discover oil prospects.

This could result in a major upside for Transocean (RIG), the world's largest offshore drilling company.

We have a $59 price estimate for Transocean, which is at a 35% premium to its current market price. (Click here for our full analysis of Transocean.)

Oil Boost

Despite several major discoveries of natural gas in offshore East Africa, explorers are still cautious because of the lack of any major oil find. Producers prefer oil discoveries as crude oil can easily be processed and sold in the international markets.

Natural gas on the other hand requires costly facilities to convert it into LNG that can be later sold to international markets. If the attempt to drill a crude oil well in Kenya is a success, it could result in a significant increase in exploration activity in the region.

Industry experts also suggest that offshore oil fields could be found in other countries such as Mozambique and Madagascar. Exploration efforts are also on in Tanzania, Ghana and Uganda.

According to its April fleet status report, Transocean has 1 of its ultra deepwater rigs contracted to drill in Mozambique. The company also has other rigs operating in African countries such as Angola, Nigeria and Ghana.

Successful discovery of oil in Eastern Africa could result in companies boosting their efforts in the region, resulting in additional contracts for Transocean. This can boost Transocean's utilization rates as well as its daily revenue as high specification rigs required for deepwater drilling yield higher daily revenue.

Click here to find out how a company's products has an impact on its stock price at Trefis.

Like our charts? Embed them in your own posts using the TrefisWordpress Plugin.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs