Seadrill Ltd Reported Q2 Results

- Seadrill Ltd Reported Q2 Results



Aug 25, 2011

Seadrill Limited (NASDAQ:SDRL) reported Q2 EPS of $1.34, vs. consensus estimates of $0.69 per share. Revenues for the quarter rose 6.6% year-over-year to $995 million, missing consensus estimates of $1.01 billion.

Seadrill has a potential upside of 23.8% based on a current price of $31.04 and an average consensus analyst price target of $38.42.

Seadrill is currently below its 50-day moving average (MA) of $33.03 and below its 200-day MA of $34.15.

Oil & Gas Post

Promote Your Page Too
- LINK
- Seadrill 2Q Earnings Climb on Demand

Seadrill 2Q Earnings Climb on Demand

- Seadrill 2Q Earnings Climb on Demand

Thursday, August 25, 2011
Seadrill Ltd.

Seadrill reports second quarter 2011 results:

Highlights

• Seadrill generates second quarter 2011 EBITDA) of US $579 million
• Seadrill reports second quarter 2011 net income of US $645 million and earnings per share of US $1.34
• Seadrill distributes quarterly cash dividend of US $0.75 per share
• Seadrill records a US $416 million gain on realization of the Pride International Inc. shareholding ("Pride")
• Seadrill exercised its right to call and retire the US $750 million 2012 convertible bond
• Seadrill ordered a new ultra-deepwater drillship for an all-in cost of US $600 million
• Seadrill ordered a new tender barge rig for a total consideration of US $115 million and a new semi-tender rig for an all-in cost of US $200 million
• Seadrill agreed to sell the jackup rig West Juno for a total consideration of US $248.5 million
• Seadrill agreed to sell the jackup rig West Janus for a total consideration of US $73 million

Subsequent events

• Seadrill acquired a 33.75 percent ownership stake in Asia Offshore Drilling Ltd through a private placement
• Seadrill's majority owned subsidiary, North Atlantic Drilling Ltd, takes delivery of the harsh environment jackup rig West Elara
• Seadrill completed the divestment of the jackup rig West Juno for US $248.5 million in early July
• Seadrill secures two three-year contracts for two jackups with a US $348 million revenue potential

Second quarter 2011 results

Seadrill reported consolidated revenues for the first quarter 2011 of US $995 million compared to US $1.11 billion for the first quarter 2011. The reduction is due to de-consolidation of Archer Limited from end of February.

Operating profit for the first quarter was US $430 million in line with the preceding quarter.

Operating profit from the Floaters was US $341 million as compared to an operating profit of US $312 million in the first quarter 2011 due to improved average economical utilization rate.

Operating profit from the Jackup Rigs amounted to US $49 million as compared to an operating profit of US $64 million in the first quarter 2011 as result of lower average economic utilization rate.

Operating profit from the Tender Rigs was US $40 million, down from US $49 million in the first quarter 2011 due to the retirement of the tender rig barge T8.

Net financial items for the quarter amounted to a gain of US $264 million compared to a gain of US $441 million in the previous quarter. The second quarter included a gain on realization of our Pride position of US $416 million whereas the first quarter benefited from a US $477 million gain in connection with the deconsolidation of Archer Limited formerly known as Seawell Limited. Loss on derivative financial instruments was US $90 million compared to a US $41 million gain in the first quarter.

Income taxes for the second quarter were US $50 million compared to US $48 million in the first quarter.

Net income for the quarter was US $645 million and basic earnings per share of US $1.35.

Chief Executive Officer in Seadrill Management AS Alf C Thorkildsen commented, "Our second quarter results reflect solid operation and performance for our offshore drilling rigs. We are in particular satisfied with the improved utilization rate for our floaters that was up from 94% to 97%. Based on a sound outlook for our industry and our solid contract portfolio we continue to be optimistic about our future earnings potential and have resolved to uphold a cash dividend of US $0.75 per share for the quarter."

Oil & Gas Post

Promote Your Page Too
LINK

Seadrill Strengthens Mid East Presence with KJO Deal

- Seadrill Strengthens Mid East Presence with KJO Deal

Tuesday, August 09, 2011
Seadrill Ltd.

Seadrill has been awarded two new contracts by KJO (AL-Khafji Joint Operations) in the joint development zone between the Kingdom of Saudi Arabia and Kuwait for the jackup rigs West Triton and Offshore Resolute. The assignments which will commence in direct continuation of their current contracts in Southeast Asia are each for a firm period of 3 years plus the time required to mobilize to the Arabian Gulf. Each contract also includes an option for KJO to extend the term for a further 1 year.

Alf C. Thorkildsen, Chief Executive Officer in Seadrill Management AS said, "These new contracts will strengthen the relationship with KJO, one of the key customers in the Arabian Gulf. In addition, relocating two rigs for term work and at attractive market rates serves our strategic desire to increase our long term presence in this active oil and gas region."

Oil & Gas Post

Promote Your Page Too
LINK

Seadrill Takes Reins at Asia Offshore Drilling Ltd.

- Seadrill Takes Reins at Asia Offshore Drilling Ltd.

Friday, July 01, 2011
Seadrill Ltd.

Seadrill has participated in a private placement in Asia Offshore Drilling Limited and has been allocated shares for US $54 million which corresponds to a 33.75 percent ownership stake.

Asia Offshore Drilling was established by Mermaid Maritime Public Company Limited in late 2010 when two MOD-V B Class jackup rigs where ordered at Keppel FELS in Singapore. Asia Offshore Drilling had in addition option agreements for construction of two similar units. The proceeds from the private placement will be used to exercise the first of the two options. Mermaid will following the private placement have an ownership share of 33.75 percent in Asia Offshore Drilling.

Furthermore, it has been agreed that Seadrill will be responsible for the construction supervision, project management, and commercial management of all of Asia Offshore Drilling's jackup rigs.

Seadrill has participated in a private placement in Asia Offshore Drilling Limited and has been allocated shares for US $54 million which corresponds to a 33.75 percent ownership stake.

Asia Offshore Drilling was established by Mermaid Maritime Public Company Limited in late 2010 when two MOD-V B Class jackup rigs where ordered at Keppel FELS in Singapore. Asia Offshore Drilling had in addition option agreements for construction of two similar units. The proceeds from the private placement will be used to exercise the first of the two options. Mermaid will following the private placement have an ownership share of 33.75 percent in Asia Offshore Drilling.

Furthermore, it has been agreed that Seadrill will be responsible for the construction supervision, project management, and commercial management of all of Asia Offshore Drilling's jackup rigs.

Oil & Gas Post

Promote Your Page Too
LINK

Seadrill to Sell Jackup West Janus

- Seadrill to Sell Jackup West Janus

Tuesday, June 21, 2011
Seadrill Ltd.

Seadrill has entered into an agreement to sell the 1985 built jackup drilling rig West Janus to Harrington LLC in Dubai for a total consideration of US $73 million.

Seadrill expects to record a gain on the sale in excess of US $50 million on closing. Closing of the agreement and the transfer of ownership of the unit is scheduled upon completion of the rig's present drilling assignment in the second half of 2011.

Seadrill's fleet of jack-up rigs remains the world largest modern jack-up fleet with a total of 19 units built after 2006, including rigs under construction. Furthermore, Seadrill has options for construction of six further units at attractive prices.

Alf C Thorkildsen, CEO of Seadrill Management AS said, "We remain optimistic about the market outlook for premium jack-up rigs, and at the same time continue to highgrade our fleet by disposing some older units, while adding new rigs to it. The disposal of West Janus further reduces the average age of the modern Seadrill jack-up fleet to 2.6 years, and is in line with our strategy of focusing our company on modern, premium offshore drilling units."

Oil & Gas Post

Promote Your Page Too

Seadrill Lines Up Semi-Tender for 2013 Delivery

- Seadrill Lines Up Semi-Tender for 2013 Delivery

Thursday, June 09, 2011
Seadrill Ltd.

Seadrill has entered into an agreement with Keppel FELS Limited in Singapore to build a new semi-submersible self-erecting tender rig (semi-tender). Total project price for the rig is estimated at below US $200 million (including the drilling equipment set, project management, spares, capitalized interest and operation preparation).

The new rig is scheduled for delivery in the second quarter 2013 and will be based on a similar design and specification as the semi-tender West Jaya, which was delivered from the Keppel FELS yard in March this year and is contracted for a minimum of two years. Similar to previous semi-tenders, the new unit is suited for harsher environment and deepwater drilling operations in combination with floating wellhead platforms such as Tension Leg Platforms and Spars.

The new unit is based on the KFELS SSDT 3600E design and adds to the seven semi-tenders that Keppel has earlier built for Seadrill since the launch of the design in 1994. The unit will feature a crane capacity of 250 tones, four mud pumps and accommodation for 160 people.

Alf C Thorkildsen, Chief Executive Officer of Seadrill Management AS said, "We are pleased to announce the addition of a new semi-tender to our existing fleet of 19 tender rigs. The tender rig business has delivered excellent operational results as well as outstanding economics over the last decade. Based on the continued strength of the offshore drilling market we continue to see strong growth and earnings potential for our business. The new semi-tender has a favorable construction price and an equipment specification list that will meet our customers' future needs. We have had very good experience with the Keppel FELS yard and this design and we are confident that the new unit will be delivered on time and within budget once again."

Oil & Gas Post

Promote Your Page Too

Seadrill Secures Rig Deal for Santos's Subsidiary Offshore Bangladesh

- Seadrill Secures Rig Deal for Santos's Subsidiary Offshore Bangladesh

Monday, June 06, 2011
Seadrill Ltd.

Seadrill has been awarded a new contract by a subsidiary of Santos Ltd. for the jack-up rig Offshore Resolute. The assignment for operations in Bangladesh will have a minimum duration of 130 days under a three firm well plus two optional wells contract. Commencement of operations under the new contract is scheduled for early third quarter 2011, in direct continuation of the rig's existing contract. The estimated contract value is USD $17.5 million for the firm 130 day minimum duration period.

Oil & Gas Post

Promote Your Page Too

PTTEP Lines Up Seadrill Jackup Offshore Thailand

- PTTEP Lines Up Seadrill Jackup Offshore Thailand

Tuesday, May 31, 2011
Seadrill Ltd.

Seadrill has been awarded a new contract by PTTEP in Thailand for the jackup rig West Leda. The assignment is for a firm period of nine months and with an option to extend for a further six months. The contract value for the firm period is approximately US $35 million. Commencement of the operations under the new contract is scheduled for late second quarter 2011, in direct continuation of the rig's existing contract.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, said, "We are pleased to secure a new contract for one of our jack-ups in the South East Asia region. We consider this as an excellent opportunity to further strengthening our relationship with PTTEP, one of our key customers. Representing a total contract value of US $35 million, this assignment improves the earnings visibility for our jack-ups."

Oil & Gas Post

Promote Your Page Too

Seadrill 1Q Earnings Soar to $816MM

- Seadrill 1Q Earnings Soar to $816MM

Friday, May 27, 2011
Seadrill Ltd.

Seadrill reports first quarter 2011 results:

• Highlights
  • Seadrill generates first quarter 2011 EBITDA of US $573 million
  • Seadrill reports first quarter 2011 net income of US $823 million and earnings per share of US $1.84
  • Seadrill distributes cash dividend of US $0.75 per share
  • Seadrill establishes a harsh environment focused drilling company, North Atlantic Drilling Ltd, subscribe for 75% of the shares in a US $1.7 billion private placement, lists the company on the Norwegian OTC and transfers five existing drilling units with contracts and staff, and one unit under construction to the new company
  • Seadrill orders a new harsh environment jack-up rig to be named West Linus and signs a five-year contract with ConocoPhillips
  • Seadrill orders two new tender rigs and signs five-year contracts for both units with Chevron
  • Seadrill takes delivery of one ultra-deepwater semi-submersible rig and one semi-tender rig
  • Seadrill subsidiary Seawell completes the merger with Allis-Chalmers Energy Inc in late February, leading to a reduction in Seadrill's shareholding to 36.5% and a deconsolidation in Seadrill accounts
• Subsequent events
  • Seadrill exercises its right to call the remaining US $750 million of the 2012 convertible bond
  • Seadrill repurchases 2.5 million of its own common shares
  • Seadrill orders a new ultra-deepwater drillship at Samsung for an all-in cost of US $600 million
  • Seadrill secures new contracts with an estimated value of US $1.2 billion
  • Seadrill orders a new tender rig for a total consideration of US $115 million
  • Seadrill agrees to sell the jack-up rig West Juno for a total consideration of US $248.5 million
  • Seadrill transfers the construction contract and drilling contract for jack-up rig West Linus to North Atlantic Drilling Ltd

First quarter results

Seadrill today reports consolidated revenues for the first quarter 2011 of US $1,110 million compared to US $1,169 million for the fourth quarter 2010.

Operating profit for the first quarter was US $430 million, down from US $479 million in the fourth quarter 2010, which included US $26 million in gain on sale of the jack-up rig West Larissa. The results for the first quarter were also impacted by lower contribution from Floaters, Tender Rigs and Well Services, following the deconsolidation of Archer/Seawell.

Operating profit from the Floaters was US $312 million as compared to an operating profit of US $322 million in the fourth quarter 2010.

Operating profit from the Jack-up Rigs amounted to US $64 million as compared to an operating profit of US $40 million in the fourth quarter, adjusted for the US $26 million gain on sale of West Larissa in the same quarter 2010.

Operating profit from the Tender Rigs was US $49 million, down from US $75 million in the fourth quarter 2010. The decrease was due to certain non-recurring revenues being recorded in the fourth quarter and the West Menang being idle in the first quarter.

Operating profit from Well Services was US $5 million, down from US $18 million in the preceding quarter, as Well Services was deconsolidated from the Seadrill accounts in February.

Net financial items for the first quarter amounted to a gain of US $441 million as compared to a loss of US $176 million in the previous quarter. The improvement is mainly related to a gain of US $477 million recognized in connection with the deconsolidation of Well Services that triggered an adjustment of the book value of our holding to reflect the market value of the underlying shares.

Income before income taxes amounted to US $871 million, while income taxes were US $48 million.

Net income for the quarter amounted to US $823 million and earnings per share were US $1.84 for the first quarter.

Chief Executive Officer in Seadrill Management AS Alf C Thorkildsen commented, "We are pleased to report another solid quarter for Seadrill reflecting a strong underlying operational performance. Furthermore, over the last three months Seadrill has secured new contracts for approximately US $1.2 billion. These contracts demonstrate the continued strength of the market for quality drilling units. In response to our solid operations, strong contract backlog and favorable market outlook, we are pleased to announce a quarterly cash dividend of US $0.75."

Oil & Gas Post

Promote Your Page Too

Seadrill Sells West Juno Rig

Seadrill Sells West Juno Rig

Wednesday, April 13, 201
Seadrill Ltd.

Seadrill has entered into an agreement to sell the newly built jack-up drilling rig West Juno to an undisclosed buyer incorporated in the UK for a total consideration of US $248.5 million.

Seadrill expects to record a gain on sale of approximately US $18 million on closing. Closing of the agreement and the transfer of ownership of the unit is scheduled upon completion of the rig's present drilling assignment late second quarter or early third quarter 2011. Seadrill expects to have an EBITDA contribution from the rig in the period up to closing of approximately US $6 million.

Alf C Thorkildsen, CEO of Seadrill Management AS, said, "We are continuously evaluating sale and purchase opportunities in order to maximize the long term return for our shareholders. This dynamic approach can from time to time lead to divestments and reallocation of capital. We have through the sale of West Juno at an attractive price been able to monetize the underlying strength of the jack up market. Although we remain optimistic on the market outlook for premium jack-up rigs, we have decided to relocate the proceeds to fund investment in other new unit as we since October 2010 have committed to investing US $4.7 billion in newbuildings."

Seadrill's fleet of jack-up rigs remains the world largest modern jack-up fleet with a total of 19 units built after 2006. Furthermore Seadrill has options for construction of further six units at attractive prices compared to going market prices.

Seadrill Adds Ultra-Deepwater Dual Derrick Drillship to Fleet

Seadrill Adds Ultra-Deepwater Dual Derrick Drillship to Fleet

Monday, April 11, 2011
Seadrill Ltd.

Seadrill has exercised an option to build a new ultra-deepwater dual derrick drillship at the Samsung yard in South Korea. Total project price is estimated at US $600 million (includes project management, drilling and handling tools, spares, capitalized interest and operations preparations). The delivery is scheduled for the third quarter 2013.

The new unit is similar to the two drillships Seadrill ordered from Samsung in November 2010 with enhanced water depth capacity, technical capabilities as well as increased accommodation capacity compared to previous generation drillships.

The dynamic positioning drillship, will be capable of operations in water depths up to 12,000 feet, and will have a hook load capability of 1,250 tons. This rig is also outfitted with seven ram configuration of the BOP (Blow Out Preventer) stack, especially targeting operations in challenging areas such as the Gulf of Mexico, Brazil and West Africa. Furthermore, the drillship will be equipped with a 165 ton capacity heave compensated crane enhancing the unit's operational flexibility and facilitating lifts on the seabed in water depths up to 3,000 meters.

Seadrill has simultaneously secured an extension of the maturity date for a further option agreement to build its seventh drillship to be delivered from Samsung since 2008. Seadrill has currently no specific plan to exercise this option, but might consider it if the strong underlying trend currently seen in the deep water market continues.

Alf C Thorkildsen, Chief Executive Officer of Seadrill Management AS, said, "The decision to add another ultra-deepwater newbuild to our modern fleet is based on the recent improvement in market outlook for ultra-deepwater units, with significantly more tender activities. The new drillship has an attractive delivery window, a favorable construction price and payment schedule and an equipment specification list that will meet our customers' future needs. We have had excellent experience with the Samsung yard and this design and are confident that the unit will be delivered on time and budget once again."

"The strengthening of Seadrill's equity basis through the recently announced bond conversion creates financial flexibility for growing the company further without raising additional equity. The current long-term dayrates give a healthy return on the investment, with further upside if the market strengthens as a result of the strong trend in the oil price.

The project will based on current dayrates and anticipated financing increase Seadrill's dividend capacity going forward. The ordering of the new drillship further confirms Seadrill's commitment to remain a growth company, with the target of reaching US $3 billion in EBITDA in the coming years."

Seadrill Semisub Finally Heads West

Seadrill Semisub Finally Heads West

Friday, April 08, 2011

Seadrill Ltd.

Seadrill has through its affiliate Sea Dragon de Mexico settled the final agreement with Pemex for the provision of the ultra-deepwater semi-submersible drilling rig West Pegasus (previously Seadragon I). The five-year assignment in Mexico has a fixed operating dayrate for the first two years, and the dayrate will be adjusted annually thereafter based on market conditions. Estimated contract value is approximately US $850 million (excluding mobilization fee) assuming a constant dayrate over the five year term.

West Pegasus was recently delivered from the Jurong Shipyard in Singapore and proceeded for mobilization to Mexico on April 1. Commencement of operations is scheduled for the third quarter 2011.

Alf C Thorkildsen, Chief Executive Officer of Seadrill Management said, "This is Seadrill's first assignment for Pemex, and it presents an exciting opportunity to develop a strong relationship with one of the largest national oil companies in the world, as well as strengthening our position in the Gulf of Mexico. This contract further underlines the value of our recent acquisition of the Seadragon units, adding significant earnings visibility at what we believe is competitive terms and conditions."

Seadrill Finalizes $4.1B Deal with North Atlantic Drilling

Seadrill Finalizes $4.1B Deal with North Atlantic Drilling

Monday, April 04, 2011
Seadrill Ltd.

Seadrill announced that North Atlantic Drilling's acquisition of our harsh-environment drilling activities was successfully completed on March 31, 2011. Closing of the transaction took place in line with the initial agreement after North Atlantic Drilling successfully completed a private placement of 250,000,000 new shares in February and secured a US $2.0 billion loan facility.

The US $4.1 billion purchase price to Seadrill was settled by North Atlantic assuming approximately US $2.0 billion in existing debt and payment obligations. This will be refinanced by drawing down the loan facility mid April.

The loan facility will have a six-year tenor with a balloon installment of US $1.0 billion at maturity. The loan will have a cost of Libor plus 2.0% margin, which is lower than anticipated in the original presentation.

Furthermore, North Atlantic Drilling has issued a US $500 million seven-year bond loan with a coupon of 7.75%, subscribed for in full by Seadrill as part of the settlement. Seadrill intends to resell the bond in the market.

The remaining part of the purchase price has been paid in cash and shares.
As a consequence of the closing, the right for North Atlantic Drilling's shareholders to put their North Atlantic Drilling shares to Seadrill at the original issue price of US $1.70 per share will expire at close of business Oslo time on April 14, 2011, i.e. 10 working days after closing of the Acquisition Agreement.

All 1,050 employees involved in the operations of the five existing operating units have accepted to be transferred from Seadrill to North Atlantic Drilling.

North Atlantic Drilling will, effective from April 1, have five drilling units in operation. North Atlantic Drilling's sixth rig, the West Elara, is expected to be delivered from the Jurong Shipyard during the second quarter 2011 and will then commence drilling operations under a contract with Statoil in the North Sea. Seadrill has furthermore decided to offer the recently ordered harsh environment jack-up drilling rig West Linus, which will be delivered in 2013, to North Atlantic Drilling at its cost. The unit has a five year drilling contract in place for operations in Norway for ConocoPhillips. It is anticipated that the acquisition of West Linus including the contract coverage can be completed without raising additional equity.

North Atlantic Drilling has issued 750 million new shares to Seadrill at a subscription price of US $1.70. North Atlantic Drilling has after the transaction 1.0 billion shares issued of which Seadrill holds 75%. The company has currently 1,190 shareholders. Of which 391 are employees in North Atlantic Drilling.

The Board of North Atlantic Drilling has subsequent to the successful completion of the acquisition agreement decided to proceed with a listing of the company's shares on the Oslo Stock Exchange. The aim is to complete the listing in the third quarter 2011.

Alf C Thorkildsen, CEO in Seadrill Management AS, said, "We are pleased to have secured the necessary financing for North Atlantic Drilling and completed the acquisition agreement in line with an ambitious schedule. This marks an important starting point for North Atlantic Drilling which will now commence operations with its rigs. We look forward to develop North Atlantic Drilling further and believe the company is well positioned to take active leadership in a further consolidation of the fast growing market for harsh-environment drilling units."

Seadrill Scores BHP Duo

Seadrill Scores BHP Duo

Monday, March 28, 2011

Seadrill Ltd.

Seadrill has been awarded two new contracts by BHP Billiton Petroleum for Offshore Vigilant in Trinidad and Offshore Resolute in Vietnam.

The three well drilling assignment for Offshore Vigilant is expected to take 150 days, and the contract value is approximately US $20 million. The two well assignment for Offshore Resolute is expected to take 90 days, and the contract value is approximately US $11 million.

Commencement of operations under the new contract for Offshore Vigilant is scheduled for the third quarter 2011, in direct continuation of existing contract and mid May 2011 for Offshore Resolute. The contract for Offshore Vigilant includes options for an additional four wells with anticipated duration of 200 days.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management, said, "This is Seadrill's first assignment for BHP. We consider this as an excellent opportunity to develop a strong relationship with BHP, one of the world's largest natural resource companies. Representing a total contract value of US$31 million, the two assignments improve the earnings visibility for our jack-ups in 2011 at market rates."