Secured two tender rigs from Seadrill
Maintain Outperform and target price of S$2.85. Cosco has announced orders for two tender rigs from Seadrill for US$130m (excluding owner-furnished drilling equipment). The two new units, T15 and T16, are scheduled for delivery in 1Q and 3Q13 respectively. This brings Cosco’s YTD orders to about US$240m, or 10% of our US$2.5bn target. Our earnings estimates are unchanged with our target price still based on 18x CY12 P/E, in line with upcycle valuations for Singapore rig builders. We continue to expect catalysts from contract wins and margin expansion.
The news
Seadrill awards two tender rig contracts to Cosco. Cosco has secured a contract from Seadrill for the construction of two tender rigs amounting to US$130m. Including owner-furnished equipment, the total contract is said to be worth US$225m or US$112.5m per rig. The rigs are based on similar designs and specs as recently built models but with enhanced drilling capabilities, allowing for higher drilling efficiency. Delivery is scheduled for 1Q and 3Q13. Both rigs are contracted by Chevron Thailand for fives years for US$420m.
Comments
What are tender rigs? Tender rigs are purpose-built rigs for production drilling from fixed platforms. The rig, which is moored alongside a platform during drilling, contains the drilling package, living quarters and power machinery. Tender rigs allow for drilling operations to be performed from platforms without the need for permanently installed drilling packages. Tender rigs operate in shallow to mid-water depths of 30-400ft. They are typically used where jack-up rigs cannot be used, such as areas restricted by subsea congestion preventing safe jack-up leg penetration, and areas comprising deep layers of soft soil which make it difficult for a jack-up’s legs to find a firm foundation. South-East Asia is the biggest market for tender rigs, followed by West Africa.
Source
No comments:
Post a Comment