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Sector Update: Energy

By: MT Newswires
Posted: 10/11/2013 1:15:00 PM
Referenced Stocks: SDRL

Energy stocks are higher, with the NYSE Energy Sector Index climbing 1.0% while shares of energy companies in the S&P 500 are up 1.3% as a group. Crude oil for November delivery is down $1.39 at $101.62 per barrel while November natural gas is up 3 cents to $3.76 per 1 million BTU.

In company news, SeaDrill Ltd ( SDRL ) is up 0.9% at $45.68 a share, reversing earlier declines and climbing to its best levels of the session after the marine oilfield services company this morning disclosed plans to sell a T-16 tender rig to Seadrill Partners LLC for around $107 million, excluding debt.

SDRL also said it remains committed as a long-term shareholder in North Atlantic Drilling after the companies abandoned talks to bring a new strategic investor as a majority owner in North Atlantic. Instead, North Atlantic now plans to seek to list as a separate public company on the New York Stock Exchange and expects to file a preliminary prospectus with regulators before the end of the year.

Also, SDRL last night said it expects to take an unspecified hit to its Q3 results after agreeing to a 37-day non-payment for its West Aquaris platform during recent repairs and modifications for use in ultra-deepwaters off eastern Canada. But while its near-term results may be hurt, the company said it is close to finalizing an 18-month contract extension for the rig through April 2017 that should be worth an additional $337 million to SDRL over the added term.

In other sector news,

(+) BHI, (+1.4%) U.S. onshore well count grows by 164 to 9,175 wells during Q3, up about 2% from a revised 9,011 wells at the end of Q2.

(+) INT, (+0.4%) Increases total revolving credit facility by $300 mln to $1.1 bln, also extending maturity date by over two years to October 2018. The facility has accordian feature allowing up to $150 mln in additional borrowing under certain circumstances.