SeaDrill to Fetch $797M from Drillship Sale - Analyst Blog

Offshore drilling firm SeaDrill Limited SDRL has inked a deal with subsidiary Seadrill Partners LLC SDLP to sell West Auriga – a dynamically positioned 6th generation drillship.  

Per the agreement, SeaDrill Limited is selling the rig for a consideration of roughly $797.0 million. The transaction, which will likely be completed within 30 days, is dependent on some necessary closing conditions.

In Oct 2013, the ultra-deepwater drillship was handed over to BP plc BP, one of the world's largest energy companies. West Auriga is now operating at a dayrate of $565,000 and will likely continue operations at the Gulf of Mexico till Oct 2020 when the contract is scheduled to end.

Seadrill Partners is planning to offer 10.4 million common units to the public for financing the acquisition. To support the funding, SeaDrill Limited will buy a minimum of $50.0 million worth of common units at a price that will be offered to the public.  

Hamilton, Bermuda-based SeaDrill Limited primarily renders services related to offshore drilling activities to customers worldwide. Currently, the company is operating roughly 69 drilling units. On Feb 25, 2014, SeaDrill Limited declared fourth-quarter 2013 results. Earnings per share came at 49 cents, which failed to beat the Zacks Consensus Estimate of 78 cents. Significant hike in operating expenses hampered the results.  

SeaDrill Limited currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the U.S. equity market over the next one to three months.  

Meanwhile, one can consider a better-ranked player in the oil and gas drilling industry like Helmerich & Payne Inc. HP. Helmerich & Payne sports a Zacks Rank #1 (Strong Buy).