UPDATE: Morgan Stanley Reiterates On North Atlantic Drilling Ltd. As Mega Deal Expands Footprint In Russia

In a report published Tuesday, Morgan Stanley analyst Ole Slorer reiterated an Equal-Weight rating on

, and raised the price target from $9.90 to $10.80. In the report, Morgan Stanley noted, “NADL / SDRL ink a massive partnership agreement with Rosneft (ROSNq.L, $6.80, rated OW by P. Sorokin): We believe NADL will fix 3 floaters to Rosneft on long-term contracts with average rates in the mid to high $500s kpd as well as 2 large CJ jackups on similar duration. NADL will also acquire a sizeable land rig package from Rosneft, backed by contracts back to the seller, in exchange for a stake in NADL. "Rosneft expects to arrive at an initial ownership of 25% of NADL, which we believe could grow over time. The deal is expected to conclude in 2H14, subject to conditions.” North Atlantic Drilling Ltd. closed on Friday at $8.50.