NEW YORK (TheStreet) -- Shares of Transocean (RIG) - Get Report closed down today, lower by 3.61% to $16 as oil prices declined.

Both Benchmarks settled lower, with Brent down 0.1% to $61.15 at 4:36 p.m. in New York. West Texas Intermediate fell 1.24% to $50.89.

Oil closed lower on Thursday in volatile trade, as a soaring dollar and the U.S. pursuit of an Iranian nuclear deal offset earlier gains from supply concerns in Libya and Iraq, Reuters reports.

The Switzerland-based deepwater driller reported surprisingly positive fourth quarter financial results last week that got some people thinking whether it was time to get into the stock. The Street's Realmoney.com contributor Daniel Dicker thinks that if you're willing to wait, the value is there.

Here is a snippet of what he had to say:

Shares of the two biggest deepwater drill owners, Transocean (RIG) and SeaDrill  (SDRL) - Get Report, were moving higher in Thursday's premarket on positive earnings. After months of bad news and falling share prices, is this the time to get back on board these specialists? Let's just say it's time to put them back on your long-term radar.

Transocean particularly shocked the Street with its ability to beat every estimate, starting with quarterly net income of $0.95 per share that was $0.17 above consensus. SeaDrill beat on revenue by a meager $10 million, but based on Transocean's good numbers, it is enjoying a strong bounce in the premarket as well.

There's a lot to decipher and digest, and a quarterly EPS beat is the least of them. These two are kings in a very specialized, ultra-deepwater rig sub-sector, and the trajectory of that sub-sector is what we need to assess before laying down our money. No need to get nervous that a $1.50 pop in RIG has suddenly taken the opportunity away in deepwater; if you are looking at either of these names, you know this is going to have to be a very long game.

Let's look at the negatives first. With oil below $75, there is little incentive to initiate new and very complex deepwater projects. This is why Transocean avoided guidance for the rest of 2015; it cannot in any way guess what revenue, beside the already-contracted $7 billion, will emerge. But we can be relatively sure it won't be much. Even if oil were to recover immediately, it would be at least a year before new contracts delivered either RIG or SDRL a decent 90% or more utilization. The nervousness about when the cycle will turn (and whether it will be in time) has led to several downgrades of both the stocks and their debt. Things aren't likely to get better until mid-2016 at the earliest.

Now let's look at the positives. Both Transocean and SeaDrill haven't been unaware of the dire conditions they're in. Both have aggressively scrapped older, more maintenance-intensive rigs and continue to lower cap-ex costs. Both have slashed their dividends -- SeaDrill completely and Transocean by 80%. We're finally done with goodwill write-downs, with Transocean taking its last one in this quarter. Leaner companies are emerging, with more modern, efficient fleets.

We can see the scenario clearly, provided these two survive: a strong recovery in oil leads directly to a shortage of deepwater assets and a spike in day-rates on floaters. Their exclusivity and specialization are what matter. In the end, major oil company have only two places to go to lease rigs capable of working a six-year project and produce oil from three to five miles beneath the sea, and it's these two names.

We've watched them get their share prices pummeled for months, and we're not predicting the end is here yet, but both are at or close enough to single digits with little risk for a long-term investment in either, besides real bankruptcy risk. Today may not be day to do it, as the euphoria of a quarterly beat is not something I ever like to trade on. Oil stockpiles will continue to increase throughout the spring, so despite Brent oil's recent rally on Libyan shutdowns, I don't see oil getting away to the upside so quickly.

Provided your outlook is ready for a two-year commitment, the value in both of these deepwater specialists has arrived. Only another two years of sub-$70 oil introduces bankruptcy risk, which I do not believe will happen. I am long SeaDrill shares.

Deepwater oil production is a vital piece of the global supply chain. They're going to drill again, you can bet on it. And when they do, only two companies can make that happen: Transocean and SeaDrill.

-Daniel Dicker, 'Put Transocean, SeaDrill Back on the Radar' originally published 2/26/2015 on RealMoney.com.

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TheStreet Ratings team rates TRANSOCEAN LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRANSOCEAN LTD (RIG) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

You can view the full analysis from the report here: RIG Ratings Report

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