Seeking Alpha

Rosneft gains stakes in North Atlantic Drilling, Seadrill in major rig deal

  • North Atlantic Drilling (NADL) +8.8% premarket after signing a cooperation deal with Rosneft (RNFTF) that will make Russia’s biggest oil company one of its largest shareholders; NADL is 70%-owned by Seadrill (SDRL).
  • NADL says the deal anticipates a number of long term contracts to pursue growth opportunities offshore and onshore in the Russian market through at least 2022, and envisions initial employment of up to nine offshore rigs to Rosneft with a total commitment of 35 rig years.
  • The companies see "huge possibilities” in the Russian market despite current tensions between Russia and the West; SDRL CFO Rune Magnus Lundetrae says, "We operate in many parts of the world where there is or can be unrest, so it’s just business as usual for us."
  • SDRL +2.4% premarket.
Comments (8)
  • Capt Jack Daniels
    , contributor
    Comments (834) | Send Message
     
    What a nice pop.
    27 May, 09:20 AM Reply Like
  • mitrado
    , contributor
    Comments (1957) | Send Message
     
    Nice! Looks like the attack on $SDRL is through.
    27 May, 09:47 AM Reply Like
  • Debutant
    , contributor
    Comments (2068) | Send Message
     
    Certain analysts in the market and their well-known Mini-Me's here on Seeking Alpha will allways attack "their targets". That's what they are paid for. But, why do you care? Do your homework, pick a stock, invest in it when the price is right, ignore the propaganda by trolls, buy more when the price is pushed down, be rich and happy.
    27 May, 11:36 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (834) | Send Message
     
    SDRl still a better investment than GM.

     

    :)
    27 May, 09:48 AM Reply Like
  • Budavar
    , contributor
    Comments (1387) | Send Message
     
    No kidding, Captain!
    27 May, 11:34 AM Reply Like
  • Budavar
    , contributor
    Comments (1387) | Send Message
     
    BINGO!

     

    The pre-market reaction muted considering the happy implications of this deal.

     

    In a nut-shell - this deal is huge.

     

    Will all the doubters about SDRL's ordering a whole raft of new units are now going to be willing to admit the wisdom of that strategy?

     

    SDRL is moving into the sweet spot again - the new rigs becoming cash cows as soon as they are delivered AND a backlog virtually guaranteeing record cash flow in the coming years. How many other investments have such promise?

     

    Add to that = a new investor in the SDRL "family" - out of left field, adding more strength to the balance sheet as we are moving forward.

     

    This is a master-stroke we have been waiting for = and it has been accomplished.
    Translation = it re-affirms SDRL's solid leadership in this high tech business.

     

    It follows the pattern of SDRL's foray into Mexico, with local partners -
    leaving the competition in the dust.

     

    Here is a bold prediction, with a caveat = before the end of this year SDRL stock could

     

    >>> sail into the 50's, even 60's,

     

    PROVIDED management will finally decide to emphasize SDRL's high tech growth mode rather than that of a less exciting income producer. Translation = management please show commendable restraint in the rate of future dividend increases.

     

    The choice IMO is crystal clear = go after a $10, even $20 billion increase in enterprise value, or continue the slow slog of the past couple of years.
    27 May, 09:55 AM Reply Like
  • go-4-it
    , contributor
    Comments (497) | Send Message
     
    I am perplexed Budavar. You have been pounding SDRL for awhile now, talking all that jibberish about Frontline and such, and now you changed your tune?

     

    I agree with you this is great news for SDRL and NADL, but you confuse me. What side of the fence are you on?
    27 May, 09:32 PM Reply Like
  • FlaYankee
    , contributor
    Comments (113) | Send Message
     
    This is a game changer for NADL which should bode well for the company going forward with numerous new drilling opportunities. For Seadrill a possible ready market for its many new builds provided they are upgraded over to harsh cold weather. These rigs could be dropped down to NADL for immediate deployment to Rosneft. Many possibilities all around. Long SDRL and NADL.
    27 May, 12:39 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|