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Seadrill Limited (SDRL)

  • Thu, Jan. 22, 7:42 AM
    • Seadrill (NYSE:SDRL) +5.7% premarket on news it will provide a guarantee for its North Atlantic Drilling (NYSE:NADL) subsidiary's NOK1.5B ($197M) bond maturing in 2018.
    • Amendments to the bond covenant package will replace NADL's current financial covenants with SDRL's covenants from its NOK denominated bonds.
    • At the same time as the amendment process for the bond agreement, SDRL also will provide a guarantee through the amendment process for NADL's secured credit facilities.
  • Mon, Jan. 5, 12:18 PM
  • Mon, Jan. 5, 9:10 AM
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  • Dec. 19, 2014, 11:44 AM
    • Transocean (RIG +4.6%) discloses that it plans to scrap seven of its older, lower-quality deepwater and midwater vessels, and adds that it may not be finished getting rid of parts of its fleet, even as oil prices and demand for offshore rigs have fallen.
    • RIG says it expects to take a related $100M-$140M charge in Q4.
    • RIG's decision to put the rigs up for sale comes after a string of vessel retirements and a $2.76B writedown of the company’s asset value in November.
    • Most offshore drilling service contractors are higher: ESV +5.1%, RDC +1.7%, DO +0.8%, ATW +3.1%, PACD +8.4%, but SDRL -4.3%.
  • Dec. 19, 2014, 7:59 AM
    • Seadrill (NYSE:SDRL) -5.9% premarket after shares are downgraded to Sell from Neutral at Goldman Sachs after issuing an upgrade just three weeks ago.
    • Also, yesterday's cancellation of the planned swap of gas assets between Gazprom and BASF may not bode well for the future of North Atlantic Drilling's (NYSE:NADL) $4.2B rig contract with Rosneft.
  • Dec. 3, 2014, 2:53 PM
    • Offshore drillers are rising modestly today after suffering a beating this year, but Jefferies cautions against seeing a buying opportunity in the beleaguered group.
    • The firm says neither fundamentals nor valuation paint a compelling enough picture of the group; "more importantly, current softness masks the evolution of deepwater drilling to where specifications matter."
    • Transocean (RIG +1.6%), which Jefferies says has the biggest contracting challenges both near-term and in the longer-run given a disproportionate mix of older UDW/UK floaters, is the least favorite name, while the firm sees relative value in Atwood Oceanics (ATW +0.7%) and Rowan (RDC +1.2%).
    • Among other offshore drillers: DO +3.1%, PACD +3.1%, ESV +1%, NE -0.7%, SDRL -0.7%.
  • Dec. 1, 2014, 3:19 PM
    • A bit late, Guggenheim analyst Darren Gacicia downgrades Seadrill (SDRL -5.5%), Transocean (RIG -4.5%) and Diamond Offshore (DO +3.3%) to Neutral from Buy, finally admitting that downward pressure on oil prices and a potential for capital markets to become shy to fund newbuild deliveries has undercut the tenets of his previous bull thesis.
    • SDRL and RIG remain the most levered to deteriorating offshore market conditions, he says, believing SDRL shares may also suffer from an ownership transition from income to value investors and RIG perhaps sharing the same fate, with a 2015 dividend cut likely amid the potential for further asset writedowns.
    • At DO, Gacicia sees risk of a dividend cut, rig retirements and deteriorating offshore market fundamentals as negative near-term catalysts; the firm also downgrades Seventy Seven Energy (SSE -16.2%), Cameron (CAM -2.8%), Frank's International (FI -0.1%) and FMC Tech (FTI -0.1%).
    • In the space, the analyst prefers drillers with high-quality assets, solid contract coverage and a lack of funding needs, such as Noble Corp. (NE -0.2%) - which also has a buyback catalyst - Atwood Oceanics (ATW -0.1%) and Pacific Drilling (PACD -3.7%).
  • Nov. 26, 2014, 12:49 PM
  • Nov. 26, 2014, 10:42 AM
    • Seadrill (SDRL -19.2%) shares are plunging after the drilling contractor suspended dividend payments due to "significant deterioration" in the broader markets, and North Atlantic Drilling (NADL -13.8%) suspends its dividend because of the delay of its agreement with Rosneft as well as the weaker market.
    • The move is slamming the entire sector, and Wells Fargo says that although SDRL is the first driller to cut its dividend, Diamond Offshore (DO -8.3%) and Transocean (RIG -4.7%) will "ultimately have to follow suit."
    • Also: SDLP -6.6%, ESV -4.8%, ATW -4.3%, RDC -3.3%, NE -3.2%, PACD -6.5%, ORIG -2.7%, HP -1.1%, RIGP -2.5%.
    • ETF: OIH
  • Nov. 26, 2014, 9:17 AM
  • Nov. 26, 2014, 7:43 AM
    • Seadrill (NYSE:SDRL) -9.9% premarket after announcing it will suspend dividend payments as Q3 profits were slashed nearly in half from the year-ago quarter.
    • SDRL says it will pay no dividend after paying $0.95/share a year earlier because of "the significant deterioration in the broader offshore drilling and financing markets" over the past quarter; SDRL says it has the ability to sustain the dividend based on its existing order backlog, but the near-term offshore market was becoming increasingly challenging.
    • SDRL expects the dividend pause to strengthen its capital position by $2B/year, which would be used to strengthen the balance sheet and invest in value-creating opportunities; the board authorizes a share buyback program of up to 10% of outstanding shares over the coming 12 months.
    • SDRL's North Atlantic Drilling (NYSE:NADL) unit also -10%.
    • Earlier: Seadrill could cut its dividend Wednesday, Morgan Stanley says
  • Nov. 24, 2014, 3:39 PM
    • Seadrill (SDRL -2.9%) is scheduled to release its financial results on Wednesday, and Morgan Stanley’s Ole Slorer thinks it could use the opportunity to cut its dividend.
    • SDRL has a current dividend yield of nearly 19%, while its North Atlantic Drilling (NADL -3.6%) unit yields 30%.
  • Nov. 13, 2014, 3:20 PM
  • Nov. 5, 2014, 3:31 PM
    • Rowan (RDC +4.4%) leads offshore drillers higher after easily beating Q3 earnings estimates and forecasting revenues to rise in 2015 despite its own predictions for a soft rig market next year; it certainly doesn't hurt that oil prices are higher today.
    • FBR Capital says it likes RDC as both a near-term idea on a sentiment snap-back and as a longer-term investment opportunity for patient investors; the firm believes the risk in RDC is mitigated by the company's fully locked-up ultra-deepwater newbuild fleet, whose contract starts account for the entirety of net earnings growth it foresees from 2014 to 2016, as well as concentrated exposure to high-spec jackups, which make up 93% of 2015 jackup earnings and should see fundamentals hold up better than the other classes.
    • Also: RIG +5.2%, SDRL +4.5%, ESV +3.6%, DO +5.7%, NE +5.4%, ATW +2%.
  • Nov. 4, 2014, 1:45 PM
    • November is just two days old, but offshore drillers Transocean (RIG -4.7%), Seadrill (SDRL -7.2%), Diamond Offshore (DO -3.6%), Atwood Oceanics (ATW -2.6%) and Noble Corp. (NE -5.2%) are down more than 8% so far this month.
    • The Zephirin Group thinks plunging oil prices are already beginning to impact demand for offshore drilling platforms, and the current dayrate range for ultra-deepwater drillships of mid $400-500/day is not helping the outlook.
    • The latest piece of evidence of the weakness is ATW's six-month postponement of the delivery of two drillships under construction, which Zephirin expects will cost the company an additional $40M-$45M per rig.
    • The firm also foresees a high possibility that the 2015-16 market and contract renewals rates could shift below expectations when energy companies start announcing 2015 capex budgets late this year.
  • Nov. 4, 2014, 9:53 AM
    • Seadrill Partners (SDLP -3.1%) agrees to acquire from parent Seadrill (SDRL -6.6%) the West Vela for $900M, less $433M of debt outstanding under the existing facility financing the ultra-deepwater drillship.
    • Seadrill Capricorn Holdings, SDLP's 51% owned subsidiary, will acquire all ownership interests in the entities that own and operate the West Vela; its portion of the net purchase price after debt would be $238M.
    • Under the terms of the West Vela contract, BP is paying a daily rate of $565K plus ~$44K/day as a mobilization fee paid over the term of the contract.
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Company Description
Seadrill Ltd provides drilling & well services to the offshore industry. It has a fleet of drilling units that is outfitted to operate in shallow water, mid-water and deepwater areas, in benign & harsh environments.