Author presents a bullish supply-constrained offshore drilling thesis on Valaris (VAL) and Noble Corp (NE), citing scarce rig supply, replacement-cost discounts, and demand growth.
VAL — LONG Author argues Valaris is a long because the offshore drilling supply/demand setup is highly asymmetric, with the global floater fleet about 50% smaller than a decade ago, zero new rig orders, and a supply gap that cannot close for at least 3-5 years. VAL trades at roughly 12% of the ~$25B cost to rebuild its fleet, has 2023 net income of $865M and backlog of $3.9B (+60% YoY), with John Fredriksen owning 9%. Catalysts cited are demand from Brazil, Guyana, West Africa, and post-Ukraine energy security plus 90-95% premium rig utilization, while main stated risks are oil price collapse, recession, and faster supply response.
The way I see it — you're buying scarce physical assets at a fraction of replacement cost, with demand growing into a shrinking fleet. These aren't tech stocks where someone can spin up a competitor in a garage. Building a drillship takes 3+ years and a billion dollars. That's a real moat imo.
NE — LONG Author argues Noble Corp is a long on the same supply-constrained offshore drilling thesis, trading at ~33% of ~$12-15B fleet replacement cost, with 2023 EBITDA of $810M and 2024 guidance of $925M-$1.025B (+15%). It has 16 floaters and 13 premium jackups, Maersk family owns 19%, and demand drivers are Brazil, Guyana, West Africa, and energy security. Risks are oil price collapse, recession, and faster supply response.
The way I see it — you're buying scarce physical assets at a fraction of replacement cost, with demand growing into a shrinking fleet. These aren't tech stocks where someone can spin up a competitor in a garage. Building a drillship takes 3+ years and a billion dollars. That's a real moat imo.
This Reddit post, published February 23, 2026, features u/Potential-Rise4152 discussing VAL, NE. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: u/Potential-Rise4152 · Tickers: VAL, NE