Image: Drillship Ocean Endeavor.
Investment Thesis
Diamond Offshore (DO) is a particularly tricky offshore drilling company to analyze. While it has managed to survive years of a depressing market environment and kept, at the same time, a solid balance sheet with room to maneuver, the company's rig fleet presents many fundamental weaknesses that haven't been addressed adequately.
Diamond Offshore should be considered as a long-term investment principally due to its solid balance sheet. However, the company must first solve urgently a vital weakness: its aging rig fleet. One possible