From a Reuters article about deepwater rig demand,
"'In the U.S. Gulf of Mexico, we have seen resurgence in activity in the deepwater and ultra-deepwater arenas over the past year,' said Michael Acuff, Diamond's senior vice president of marketing, predicting as many as 40 deepwater rigs could be working there next year, up from 31 now."And then, from a Deloitte "Oil & Gas Mergers and Acquisitions Report, Midyear 2012" [pdf],
"[H]alf of the current jackup fleet industry-wide is 30 years or older, added Noble Chief Executive David Williams, who expected many of those to be pulled off the market. 'You'll see more retirements in the next 10 years than you have in the past 10 years'"
"A notable change in the E&P segment compared to the first half of 2011 was the surge of activity in the Gulf of Mexico. Rig count in the Gulf has recovered to pre-Macondo levels. 'In the Gulf, lots of projects were underway when the Macondo incident stopped all activity two years ago [...] Those projects have now resumed and we are seeing a pickup in activity.'"I've mentioned before - the GOM is the key market for Conrad, because their higher margin repair business is obviously going to benefit from more nautical activity taking place right in their backyard.
"An indicator of industry confidence in this area and of strong future activity was the successful $1.7 billion sale of Gulf of Mexico permits that took place on June 20. The three largest bidders in the sale were international integrated companies, with Norway’s Statoil the highest bidder. 'That shows worldwide recognition that the Gulf of Mexico is still one of the best places in the world to invest [...] This is clearly another bright spot in the U.S. for future activity.'"
There are currently five factors acting as a tailwind for Conrad shares: low valuation, accretive repurchases at low valuation, at a point with several more strong years of inland barge replacement (keeping competitors busy), petroleum liquid production in new areas creating demand for new fleets of tank barges, and a return to high levels of GOM activity for the first time in years.