Seadrill's (SDRL) $4B commitment for the use of three offshore rigs in the Gulf of Mexico should...


Seadrill's (SDRL) $4B commitment for the use of three offshore rigs in the Gulf of Mexico should assuage concerns about the company's ability to contract out all the rigs it has ordered as speculation rigs, blogger Power Hedge writes, calculating the contract works out to ~$576,800 per rig per day over six-plus years and increases SDRL's contract revenue backlog by nearly a third.

From other sites
Comments (12)
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    Hmm thats a lower per rig per day price then the last deal isn't it?
    27 Jul 2012, 03:46 PM Reply Like
  • Power Hedge
    , contributor
    Comments (1111) | Send Message
     
    Yeah, it is. The Gulf of Mexico is usually cheaper than the North Sea/West Africa/Brazil, though. It's not a low rate for the region. It's higher than what PACD, DO, and ESV have been getting recently (both in the Gulf and in more expensive areas).
    27 Jul 2012, 03:52 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Yes. We are reaching a point of very high rig utilization rates. That doesn't leave too much room for expansion without more investment. The additional backlog is a good sign, but those revenues don't begin until over a year from now. Once a slight dose of reality sets in, people read the details, and then Mario Draghi fails on his big promise at the ECB, we will see a dip in share prices. I would use macro weakness and a dip to buy more shares, though at the moment I am looking to diversify amongst some drilling companies, where I was previously heavy into shares of SDRL
    27 Jul 2012, 03:53 PM Reply Like
  • Power Hedge
    , contributor
    Comments (1111) | Send Message
     
    Good point. The start up of operations are scheduled for September and December of next year.

     

    I'm still fond of SeaDrill but I've started diversifying as well. I'm buying Sevan Drilling in Oslo and considering NE... I like some of NE's new contracts and their growth potential.
    27 Jul 2012, 03:56 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Noble Drilling (NE) is the other company I have been looking into. My other diversification is once again in offshore construction through Cameron (CAM), which I got very close to the low, and McDermott (MDR). All these are multi-year long investments.
    27 Jul 2012, 04:40 PM Reply Like
  • sethmcs
    , contributor
    Comments (3549) | Send Message
     
    Fiddle sticks I wanted SDRL @ $30.85. Made chump change on selling puts. Need Merkel and the European clown show to take the market down but they are on vacation. Upsetting!
    27 Jul 2012, 03:46 PM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    I just took a small bite at 39.71, I think the future outlook is good. Will increase over the course of the year if it dips back to it's lows.
    27 Jul 2012, 03:47 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Mario Draghi of the ECB has promised many ways to prop up the Euro. The next policy meeting is next week. Even then, he has until around 20 August 2012 to get things sorted and approved. Leading into that date we can expect more trouble from Greece, as they run out of funds to continue operations. One somewhat low odds guess of mine, but still a possibility, is that Greece may move to nationalize one or more banks, thus giving them some funds for operations.
    27 Jul 2012, 03:55 PM Reply Like
  • surfgeezer
    , contributor
    Comments (10023) | Send Message
     
    I thought the most important thing was the much more definite talk of MLP status financing.
    27 Jul 2012, 11:36 PM Reply Like
  • dronet01
    , contributor
    Comment (1) | Send Message
     
    Dividends mean are important to me. I'll stick with sdrl and add with a dip.
    28 Jul 2012, 06:56 AM Reply Like
  • KenNagle
    , contributor
    Comments (291) | Send Message
     
    While oil prices and the European clown show will continue to affect Seadrill PPS, I don't see it falling to sub $34. Dividend has been increasing and more investors have been buying. Plus much more electronic media exposure. Even Cramer is now getting calls on Seadrill. Alhough I think he does not understand the stock. This stock is worth $45 right now and should go to $50 IMHO.
    29 Jul 2012, 11:20 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (3408) | Send Message
     
    SDRL dividend has been excellent, not to mention its special dividends as well.
    18 Aug 2012, 07:28 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs