Transocean (RIG). Odd, no?

RIG has printed $139.50 this morning.

Yesterday, Fitch downgraded RIG’s senior unsecured bank facility to BBB from BBB+. Yet the stock was up almost 5% with oil down and closed at $135.75. Odd, no?

Maybe it’s because of the trend for the increase in day rates on deepwater drilling projects. Or maybe its because of the merger with Global Santa Fe (GSF), creating a $53 billion revenue generating monsta driller. (Btw, I like GSF because it has “Santa” in it). Or, could it be that RIG has no sub-prime or overly tanned CEO’s?

Like it or not, Green-turds, the world needs oil to run and offshore is a vastly untapped area. However, due to political asshattery in countries like Venezuela, Nigeria, and other third world countries, I would expect most of the offshore drilling to focus off North American and European shores.

FYI… RIG just inked a deal for a 4-month contract at a day rate of $600,000 on their Pathfinder rig to start in June 2009. As I mentioned in a previous PG post, they have a backlog of $33 billion and it is growing. IMO, there will be more of these deals to come as the cost of finding and recovering oil is getting harder and more expensive. Oil will go well over $100 in the coming year.

Note: Under the terms of the merger, RIG shareholders will get $33 cash per share plus 0.6996 share of the new company (”RIG”) for each share they currently own. GSF shareholders will get $22.46 in cash plus 0.4757 share of the new company. The combined company will have 318 million shares outstanding (322 million fully diluted). For tax purposes, the cash distributions will be treated as stock redemptions, meaning that shareholders will treat them as partly return of capital and partly gain or loss on sale.

By the way, insiders have been buying the stock.