New Transactions, Revenue Backlog to Boost Growth- Research Report on Seadrill
Seadrill looks to build on its bright future with record highs in revenue
backlog and earnings visibility, as well as improving access to capital and
asset mix and new acquisitions
NEW YORK, January 24, 2013
NEW YORK, January 24, 2013 /PRNewswire/ --
Norwegian offshore driller Seadrill (NYSE:SDRL) [Full Research Report]^(1),
known for its high dividend yield stock, has secured itself for further growth
in the future after announcing its plans to introduce 22 newbuilds into its
current fleet of 48 drilling units over the next two years.
In addition, Seadrill has a record high revenue backlog of $19.7 billion and
has earnings visibility as markets from all asset classes are improving.
Motley Fool expects the company to add to its backlog up until next year as
2014 newbuild deliveries start to contract out. At present, it has a diverse
asset base of 24 drillships & semi-submersibles, 21 jack-up rigs and 21 tender
The company also improved its access to capital and asset mix by floating its
master limited partnership division, Seadrill Partners. In addition, they
managed to increase its stake in Asia Offshore Drilling at 66.16 percent after
failing to secure the purchase. It now owns twice as much of the company,
expanding the company's position in the shallow-water sector of the offshore
Seadrill announced the sale of its tender rig division to Malaysian oil and
gas firm SapuraKencana for $2.9 billion, including $363 million in remaining
capital expenditures on the company's newbuild tender rigs, $187 million in a
seller's note, and $350 million worth of new shares of SapuraKencana. The
company will also assume the debt Seadrill's tender rig division, which is at
A report from Seeking Alpha says pushing for an acquisition rather than build
new rigs, which could take at least two years, would make better sense for
Seadrill. Aside from that, shipyards can only build so many rigs at one time,
considering constraints on space, manpower, equipment and other resources.
Fortunately, Seadrill has secured build slots at various shipyards, enabling
them to construct new rigs even with capacity concerns. However, an
acquisition would give the company a ready-made fleet of rigs without having
to wait years to obtain and begin using the rigs. This would drastically
increase its operating fleet and start generating revenue, cash flow, and
profits right away.
Nevertheless, investors can expect substantial payouts ahead into the future
as Seadrill rakes in the revenue and additional oil production either through
new rigs or acquisitions they have planned. It wouldn't be surprising if the
$38.16 stock price would be in the hundreds not far from today.
^(1)The Full Research Report on Seadrill Ltd. - including full detailed
breakdown, analyst ratings and price targets -is available to download free of
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