I think the offshore drillers could make a big move this summer followed by a rebound in the onshore drillers this fall.
From Raymond James on Monday:
The long-term prospects remain promising for the offshore drillers, particularly ultra-deepwater rigs.
We can't ignore the potential for sector rotation out of the recently outperforming offshore drillers into the more beaten down North American land-centric names. However, it's important not to lose sight of the strong supply/demand (Brent driven) fundamentals offshore. In the near term, we believe that we are essentially sold out of ultra-deepwater rigs until 2014, which ushers the prospect of taking leading edge rates north of the $650,000/day mark, up from the current $550,000-$600,000/day range. Longer term, we believe the global demand picture is strong enough to absorb the current newbuild supply. We remain positive on the following stocks in light of our long-term bullishness: ORIG, ESV, NE, and NOV.
FWIW: Unit Corp. has a significant E&P Division. I found out today that they have recently drilled some very good Mississippian wells in Oklahoma and Kansas. If you are unaware of what is going on up in the Mississippi Lime Play, you need to educate yourself. This is a very good oil play with tons of running room. Devon is now quite actice in the play. SD is the most active player. - Dan