Land drillers, as a group, are attractively valued today. We believe fears of another collapse in drilling activity similar to 2009 are overdone. While these drillers have no economic moat, their current competitive position is perhaps the best in the past decade. Prior industry cycles were driven by supply/demand dynamics, but with a U.S. fleet of mostly mechanical rigs that were refurbished over time as they aged. In our view, there was little differentiation between the top drillers and the rest of the industry. However, the shift toward horizontal and oil-directed drilling away from vertical and gas-directed drilling, thanks to the emergence of various shale plays in the United States, has driven huge demand for new premium land rigs, allowing the industry’s top drillers to differentiate themselves from smaller peers by offering more powerful rigs.