Seeking Alpha

Seadrill signs Mexican rig deals worth $1.8B

  • Seadrill (SDRL -1.7%) says it secured contracts to rent out five of its jack-up rigs to Mexican oil firm Pemex, with expected revenues of more than $1.8B over a six-year period.
  • SDRL also will establish a joint venture with an investment fund controlled by Fintech Advisory which will own the rigs working for Pemex; the new company, called SeaMex, will be owned 50% by SDRL and 50% by the Fintech fund.
Comments (27)
  • fredu89
    , contributor
    Comments (13) | Send Message
     
    Oh no, more revenue for the company. This must mean that the dividend will be cut by half.
    18 Feb, 12:37 PM Reply Like
  • Gary Grant
    , contributor
    Comments (120) | Send Message
     
    Fred - touche. So many doom and gloom articles recently about its dividend. I think that John Fredickson is a lot savvier than the writers of those articles and knows how to maintain the dividend.
    18 Feb, 12:45 PM Reply Like
  • mitrado
    , contributor
    Comments (1916) | Send Message
     
    I was enjoying the ride down... now I'm confused. I wanted more at $32.3 and now I'm starting to think I won't get it.
    18 Feb, 12:54 PM Reply Like
  • bleweagle
    , contributor
    Comments (26) | Send Message
     
    I am new to this one, I own some shares, should I just, "hang on" for the LONG ride? Is this buying opportunity. Do you see it going lower, before going higher? Please advise / comment.
    Thanks michael in seattle,
    18 Feb, 01:31 PM Reply Like
  • farstud
    , contributor
    Comments (84) | Send Message
     
    man michael, this is a very cyclical industry. SDRL is tempting, but it is a bit of a spec play at this time. no one *knows* the answers to your questions. if oil prices stay stable, i think this is a good long term buy. they will get contracts on their new rigs, have to be patient.

     

    if you are more risk averse a similar, safer play would be ESV or NE
    18 Feb, 03:18 PM Reply Like
  • linkdonald
    , contributor
    Comments (449) | Send Message
     
    This is good news on two counts: First , it demonstrates that quality rigs by SDRL are in demand (though a sale rather than lease would probably have been preferable) and Second: It shows that some glimmer of economic sanity seem to be emerging in Mexico where the terms PEMEX and corruption are synonyms.
    18 Feb, 01:31 PM Reply Like
  • GemmaBaby
    , contributor
    Comments (3) | Send Message
     
    Hear, hear,!!! The blathering talking heads will no doubt find some way to put a negative spin on this news.
    18 Feb, 01:41 PM Reply Like
  • financeminister
    , contributor
    Comments (572) | Send Message
     
    I have half my full position at $40 a share...if I had more cash, I would have bought the other half. This is such a good oppertunity to add to an existing position. SDRL is in my Roth IRA and I've used this year's allotment completely. I can maybe start another position in my regular IRA where I haven't used up this year's position. Hopefully it stays subdued for sometime in the $35 to $36 range.
    18 Feb, 01:44 PM Reply Like
  • 2839298249
    , contributor
    Comments (174) | Send Message
     
    Several positive pieces to consider in the news release: 1. long-term revenue booked for jack-ups, which is always a positive. 2. the formation of the Mexico JV "SeaMex" will solidify SDRL's Mexico position 3. SDRL will realize gains from the sale of the jack-ups into the JV, increasing cash available. 4. long-term bookings at respectable rates show that supply/demand is still favorable for drillers.
    18 Feb, 01:48 PM Reply Like
  • Lee 99
    , contributor
    Comments (400) | Send Message
     
    AC 283: rent, not sell.
    PEMEX needs the operators too.
    But higher rates, increase in backlog by 9%, big foot in door with Pemex should only drop the stock about $3/share. (Note to self: stop reading SA articles.)
    18 Feb, 02:52 PM Reply Like
  • 2839298249
    , contributor
    Comments (174) | Send Message
     
    Read the press release: The gross proceeds for the sale of 50% of the five rigs to our partner is expected to be around US$488 million and will result in a gain recordable in the first half of 2014.

     

    SDRL is selling a 50% interest in the rigs to SeaMex.
    18 Feb, 08:38 PM Reply Like
  • mamerritt
    , contributor
    Comments (32) | Send Message
     
    The USD $1.8b contract is old news, and works out to an average day rate of roughly 164,000.

     

    The new news here is the SeaMex deal, which is typical JF and frankly, was expected. Consider this another "drop down" vehicle where control and cash flow is maintained, and a sale of assets in approximately 2Q14 of 488 million will be recorded.

     

    We need another round of hysteria. We need an article explaining how Sevan Rig 4, West Tellus, Prospero, Vigilant, Ariel, Tucana, Telesto and Cressida aren't yet under announced contracts for at least portions of 2014, and why JF is suddenly going to fail to get those contracts done.

     

    Shaking loose some more cash this week, so I'd appreciate it if the bears and shorts would do their thing again.
    18 Feb, 03:00 PM Reply Like
  • glf4mny
    , contributor
    Comments (226) | Send Message
     
    Seadrill and Pemex.......uh, remember the Alamo!
    18 Feb, 06:32 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (616) | Send Message
     
    Similar announcement likely to come w PBR in my opinion.
    18 Feb, 07:59 PM Reply Like
  • Njbinvest
    , contributor
    Comments (5) | Send Message
     
    New to posting. Not sure if previous took.

     

    lT SDRL holder, and bought more today
    18 Feb, 09:57 PM Reply Like
  • Njbinvest
    , contributor
    Comments (5) | Send Message
     
    New to commenting. SDRL has been a favorite for over 3 years. Up/down could care little. I am now over 15% annual return on my original investment. Bought more today.

     

    Of course one always has the option to invest in a MM fund.
    18 Feb, 09:58 PM Reply Like
  • tankerat
    , contributor
    Comments (219) | Send Message
     
    John Fredriksen and Tor Olav Troim ..[much smarter in spades vs. the bashers here]...timed this PEMEX-SEAMEX-5 rig deal and excellent day rates announcement ...[an amazing addition to the long term contracted backlog]...to thwart the low level and less informed denizens of Seeking Alpha....

     

    Just wait for next weeks quarterly report and guidance.

     

    If you can...read Ole Slorer's report dated today..from Morgan Stanley...

     

    He is one analyst who get's it...

     

    Do any of you know who Fredriksen's partner is in SeaMex???

     

    No??? You really should...but likely you don't know how to find out...too bad...

     

    I know...but ..keep on bashing...bashing works until it doesn't...

     

    Just don't stay short too long...
    18 Feb, 11:50 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (616) | Send Message
     
    MS has very positive comments here over the last few days.
    I just completed a little digging on the Seamex deal. It appears the Seamex deal is with Fintech Advisory aka David Guzman. Shorts will be leaving soon.
    19 Feb, 07:48 AM Reply Like
  • tankerat
    , contributor
    Comments (219) | Send Message
     
    Does anyone here actually know who David Guzman is..and the implications in that for success for SeaMex and Seadrill...??

     

    I really doubt it...

     

    I do know...and Fintech will help make the Seadrill Mexico deal a 6 year success story and will allow David Guzman to "deal with" PEMEX and all that implies....

     

    Do you SA types understand what I am saying???

     

    I didn't think so...

     

    Not only that, the Guzman involvement will likely lead to future deals with PEMEX for some UDW rigs going forward...

     

    Watch..and see...

     

    TR
    19 Feb, 12:05 PM Reply Like
  • 2839298249
    , contributor
    Comments (174) | Send Message
     
    I do know him and he usually goes by the name of David Martinez.
    19 Feb, 12:08 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (616) | Send Message
     
    Yes, David Martinez, I had an error.
    19 Feb, 12:09 PM Reply Like
  • 2839298249
    , contributor
    Comments (174) | Send Message
     
    My post was for tankerat who knows David Martinez so well that he calls him David Guzman...
    19 Feb, 12:12 PM Reply Like
  • tankerat
    , contributor
    Comments (219) | Send Message
     
    His name is David Martínez Guzmán...a matter of record and not speculation...
    19 Feb, 12:52 PM Reply Like
  • 2839298249
    , contributor
    Comments (174) | Send Message
     
    You know him so well maybe you call him that, but nobody else does...
    19 Feb, 12:54 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (616) | Send Message
     
    I did once. :)
    19 Feb, 12:58 PM Reply Like
  • 16730672
    , contributor
    Comment (1) | Send Message
     
    Just to mention - weakness looks different…
    West Oberon (New built)
    West Intrepid (until 4Q2013 KJO: 180,000/day)
    West Defender (until 1Q2014 Shell: 136,458/day)
    West Courageous (until 1Q2014 Hess: 150,000/day)
    --> average of 155,486/day
    PEMEX: roughly 164,000/day for 6 years
    so what?
    19 Feb, 01:17 AM Reply Like
  • tankerat
    , contributor
    Comments (219) | Send Message
     
    Hmmm...Fredriksen get's $488 million for 50% of the 5 rigs...do you actually know what the 5 rigs cost Seadrill??? You don't...I'm stunned! ..You could look it up [if you know how...]....

     

    If not...don't worry...some of us know those numbers...TR
    19 Feb, 01:32 AM Reply Like
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