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Terranova: Big Changes Coming To Oil Exploration

Tuesday, 4 May 2010 | 5:56 PM ET

In the wake of the terrible oil spill in the Gulf of Mexico, Joe Terranova is hearing some big changes lie ahead in the oil services sector.

If you watch Fast Money regularly you know that Terranova is a highly accomplished energy trader and very connected in his field.

And his sources are telling him that going forward deep water drilling is off the table. “I’m talking about drilling 5,000 feet or more. That’s off the table going forward in this country,” says Terranova.

BP Rises Even As Oil Gushes
Deep water drilling is over as an industry.

”I’m hearing that we see a moratorium on all new projects. In addition, current projects will be heavily inspected,” he says.

That impacts Diamond Offshore, Ensco, and Transocean; they all have significant focus on deep water drilling.

However where there's pain, there's also gain.

”Land drilling probably wins to this,” Terranova adds. “I’d look at BP or Anadarko for that.”

(That may explain why BP traded higher, despite being the company most closely associated with the spill in the Gulf.)


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Trader disclosure: On May 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (PFE); Najarian Owns (GS) Calls; Najarian Owns (MS); Najarian Owns (C) Calls; Najarian Owns (SFD) Calls; Najarian Owns (TEVA); Adami Owns (AGU), (C), (INTC), (GS), (NUE), (MSFT), (BTU); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (USO); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (AEO), (ARM); Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (BAC), (BAC) Calls; Finerman's Firm And Finerman Own (CVS); Finerman's Firm And Finerman Own (JPM); Finerman's Firm And Finerman Own (RIG), (RIG) Calls; Finerman's Firm Owns (WFC) Preferred; Terranova Owns (PFE), (SWN), (XCO), (TER); Terranova Owns (C) May Calls; Terranova Is Long Gold June 2010 Futures; Terranova Is Short (CMA); Edwards Owns (VXX); Kelly Owns (FXE) Puts; Kelly Owns (FXB) Puts; Cortes Is Long Treasuries; Cortes Is Long U.S. Dollar; Nations Owns (SPY)

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