There's a lot to like about Seadrill ; but, in this video, Jim Mueller gives us three things to watch for as warnings signs to sell.  First, Seadrill is expanding its rig fleet rapidly and incurring significant debt doing so. Second, utilization rates need to at least stay level, and preferably increase. If rates start to decrease, this could be trouble for the company. Third, Seadrill is ordering new rigs without a guarantee that they will be used once the rigs are built. If oil prices drop or demand for deep rigs declines, Seadrill could be in for a rough time, and investors should seriously consider selling.

If you're an energy investor looking for exciting opportunities, then you should look into one of the more intriguing plays in the space: Seadrill. To learn more about the strengths and weaknesses of this company, as well as what to expect from Seadrill going forward, be sure to check out this brand-new premium report put together by one of our top Stock Advisor analysts. Click here to get started.

The article Is It Time to Sell Seadrill? originally appeared on

Austin Smith owns shares of Seadrill. Jim Mueller owns shares of BP p.l.c. (ADR) and Seadrill. The Motley Fool recommends Seadrill. The Motley Fool owns shares of Seadrill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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I just finished a couple of years working out of the Nigerian Delta to offshore rigs. Forget the people doing "What if" here. There aren't enough rigs for the work they have in Nigeria and I don't see Obama trying to get them back to the USA. Every major operator there wants more rigs. As for me, I'm putting some money in Pacific Drilling. After a few safety issues on the older rigs, personally I see a demand for the latest and safest technology, ego, PACD. I don't know stocks, but I know the oil companies and this is all long-term DEEP WATER drilling.

February 15 2013 at 4:17 PM Report abuse rate up rate down Reply