The thesis for drilling companies was that there is no more supply of new jack-ups. A new one takes about $300 million to build and needs a decade+ to recover. It is possible that this supply led bull run has already played out in the last 5 years when Jindal drilling went up 10x. Those who bought earlier in late 2024 or early 2025 (when the 2000 Cr market cap company started surfacing in social media) might have bought when all positives are already known to market.
The best time to buy Jindal drilling was when day rates were at $20K. But investing isn't that simple. Is it?
The impact of lower day rate could be quite severe. See this article https://www.offshore-energy.biz/transocean-noble-valaris-borr-and-odfjell-drilling-fleets-23-billion-backlog-spotlights-state-of-play-in-booming-rig-market/. The demand for jack-ups are projected go down further. Next renewal discussions are in 2026, but if things pan out as per this article, $80K+ may not be possible anymore.
The thesis for drilling companies was that there is no more supply of new jack-ups. A new one takes about $300 million to build and needs a decade+ to recover. It is possible that this supply led bull run has already played out in the last 5 years when Jindal drilling went up 10x. Those who bought earlier in late 2024 or early 2025 (when the 2000 Cr market cap company started surfacing in social media) might have bought when all positives are already known to market.
The best time to buy Jindal drilling was when day rates were at $20K. But investing isn't that simple. Is it?
Yes, Rajesh ji. You are right!
That's what we have tried to highlight in the risk segment.
The purpose of this blog is to highlight the fact that how something that’s going so well can suddenly change it’s direction.
Very well written @Harshal Bhai