As oil prices dropped recently many have predicted the end of drillers such as TransOcean (RIG). The company has certainly experienced its share of disappointments. From the Gulf experience with BP to the CEO being charged with a lack of vision for the future as he was shown the door by the Board of Directors. By the way, this is the same CEO that was commended for leading the company through the Deepwater Horizon disaster.

CEO vision many times is a matter of timeframe. Someone that saw the impact of the personal computer in the early days might have been accused of lack of vision as they wasted millions of dollars developing a software called Disk Operating System (DOS). Thank you Bill Gates for having a lack of vision. Fortunately, Bill did not have to worry about activist investors sitting on his board at Microsoft. Transocean does not currently have that option. Two of the current Directors are hand-picked supporters of Carl Ican who insisted on an increased dividend last year.

After surviving the Deep Water Horizon disaster in 2010, the increase in dividend might have been too soon. The company was already paying above the general market rate and the new rate placed it in the stratosphere. The recent drop in dividend to $0.60 (2015 Feb 15) from $0.75 is actually above the 2013 February rate of $0.56.

The vision conflict between the ousted CEO and the Board might be over timing rather than lack of market understanding. Mr. Ican’s Board picks will most likely leave once they have scraped enough profitability into their own coffers (short term) and the company can go back to doing what it does best, managing the company (long term). Or, the activists might start a move to split the company up into smaller pieces so as to receive a larger net share price in the subsequent follow-on transactions. Either way, ownership of the share can prove profitable to an investor that is comfortable in experiencing a bumpy ride.

The company is not without some concerns with over $2 billion in debt and a market that, at least for the time being, is showing stability but, at a much lower raw material price. The company is not sitting still. Management has renegotiated contracts pushing some developments and installations out 6 months. This is not out-of-step with the industry which is delaying capital investments for up to two years.

Oil exploration is not going away and global demand is consistently moving in an upward direction over a longer vision period. Transocean is the largest player in the market segment and can most likely, but not guaranteed to survive the activist short term vision. The share price is currently well undervalued, can produce excellent dividends and share price appreciation if given the opportunity and time. The activists need to exit the company and let management get back to managing the company rather than the “visionaries” short-term expectations.