I’ve just added the last bit I can justify buying to my Seadril position, which was already my largest holding. I bought more shares this morning at a hair under $31, and now have an average cost basis of about $23.
Clearly, I’ve written more about Seadrill in the short history of this site than about any other company — it’s still officially up as my “best idea” until I submit another one for you near the end of June. I don’t have a lot to add about the company or its prospects, other than to note that I said in my in-depth writeup that it wouldn’t be shocking if the shares fell back after their quick runup this year and will be susceptible to oil price changes, but that I would be surprised if it falls much below $30.
That’s still my thinking, though over the next several months we’ll learn much more as a huge number of new rigs get delivered (or fall behind schedule, which would be bad), and we get more information about the sale/leaseback transactions that are expected to come to fruition for many of these rigs in the coming year (and which could be accompanied by rising dividends, though the current implied dividend going forward is already a decent $2.40 a year, which they will be loath to cut).
So, not much news about the company since earnings, though they did take the opportunity to order some new Jack-up rigs for 2011 after seeing the market for these shallow water rigs remain stronger than expected (and after seeing that the prices they could pay for these newbuilds are not as bad as one might expect, given inflation and higher rates year over year).
I’ll keep watching, with interest.