Norwegian oilfield service firm
) secured a contract extension offer for its ultra-deepwater
semi-submersible rig West Leo from Tullow Oil plc, a leading oil
and gas exploration and production company. The deal has been
extended for a period of two years from May 2016 to May 2018.
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Management expects the extended contract to have a revenue
potential of $450 million. The latest development is also
expected to bring the total contract value to $1.13 billion.
Seadrill got the delivery of West Leo in early 2012 from the
Jurong Shipyard in Singapore. The semi-submersible rig has been
working for Tullow off Ghana, West Africa at a dayrate of
$525,000 and is expected to work there at a dayrate of $616,000,
after the latest deal. Until the end of the project, the rig is
expected to remain in the West Africa play.
West Leo - a unit of Moss Maritime CS50 Mk II design - is
suitable to work up to a water depth of roughly 10,000 feet and
can drill up to a maximum depth of 35,000 feet.
Earlier, in November 2012, Seadrill received a contract for its
newbuild rig West Mira from Husky Energy. The development extends
for a period of five years and was estimated to have a revenue
potential of $1.18 billion.
Based in Hamilton, Bermuda, Seadrill renders offshore drilling
services, which include exploration, completion and maintenance
of offshore wells; production and well maintenance; and well
services to customers worldwide. As of June 30, 2012, the
company's fleet included 43 offshore drilling units and 18 other
units under construction.
Seadrill currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Energy firms, which are expected to significantly outperform the
equity markets in the next one to three months are
Seadrill Partners LLC
Atlas Energy, L.P
Crestwood Midstream Partners LP
), all of which are maintaining Zacks Rank #1 (Strong Buy).