The effects of the Deepwater Horizon Rig Explosion Continue

According to The Wall Street Journal Houston, Texas-based offshore oil driller, Pride International Inc., is evaluating strategic options for the future, which could include selling to a larger offshore drilling company. Pride is considering this option because of the potential onslaught of offshore drilling regulations soon to be passed by congress. Other possible options that Pride International are currently evaluating include a strategic alliance with another offshore drilling company such as Norway’s Seadrill Ltd. or Britain’s Ensco PLC. Other companies currently facing this uncertainty include another Houston, Texas-based offshore oil driller Seahawk Inc., a former affiliate of Pride International, who are at the moment weighing their options on what to strategically do.

I believe that Pride International Inc.’s current situation reflects that of many other offshore oil drilling companies, who are presently struggling to make ends meet due to the recently lifted Moratorium and the oncoming regulations. If Pride International does decide to allow themselves to be acquired by another company then a good match for them could be Seadrill Ltd., who employs similar equipment to them on drill sites and at the moment has a small stake in Pride International Inc. According to The Wall Street Journal further solidifying my belief that Seadrill Ltd. will acquire Pride International is the news that they have been aggressively courting Pride for an acquisition for months. As a result of this speculation on Pride International’s future their stocks rose 11% on the evening of November 2, 2010, which could lead to interest from other companies as more investors are beginning to buy stock in Pride International. Pride appears to be a good investment both in the short and long term as their stock prices go up and the potential of further earnings from a merger become ever greater.