ETF Trends
ETF Trends

Oil drilling exchange traded funds (ETFs) are moving big today after a blockbuster merger webt through, creating the world’s second-largest offshore driller.

Offshore drilling specialist Ensco (NYSE: ESV) said on Monday that it would acquire Pride International (NYSE: PDE) of Houston for $7.3 billion in cash and stock. [A Surge in Commodity Prices: ETFs Didn’t Do It.]

According to Andrew Ross Sorkin for DealBook, the merger will create the second-largest offshore driller in the world with 74 rigs around the globe. The combined company will have 21 ultra-deepwater and deepwater rigs. [Energy ETFs Surge As Oil Tops $100.]

The deal had an impact on several energy-related ETFs in early market trading. HOLDRs Market Oil Service (NYSEArca: OIH) is up 1.5% so far today – Ensco is 3.9% of the fund, which has just 14 holdings in total.

Ensco’s deal is thought to be the first of many mergers among drillers as a rig-building boom kicks off, say Joe Carroll and Meera Bhatia for Bloomberg.

The anticipation of such a boom has other oil-services ETF trading up today, too. SPDR S&P Oil & Gas Equipment & Services (NYSEArca: XES) is up 2.5% today, though it doesn’t count Ensco as a holding in any amount. Likewise, PowerShares S&P SmallCap Energy (NYSEArca: XLES) is up by the same amount though it doesn’t own Ensco.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.