Transocean to Acquire Valaris in $6.5 Billion Offshore Merger – Merger Arbitrage Mondays

Valaris Limited (VAL): $95.96

Market Cap: $6.68B

Deal Size: $6.51B

I was an energy tourist in the 2010s and as could be expected, my inexperience was rewarded with losses. One of those companies that delivered losses was the deep offshore drilling services company Noble Corporation (NE), which eventually went bankrupt in July  2020.

While I exited my stake long before bankruptcy, the investment taught me a lot about the energy industry including the various types of drill ships, their day rates, things like cold stacking (more on that later) and warm stacking as well as the price of Brent crude oil where offshore drilling becomes economically feasible. This helped me with various profitable investments including the fracking company Diamondback Energy (FANG) and more recently offshore oil services company Tidewater (TDW).

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