Seadrill orders another drillship at Samsung

John Fredriksen’s Seadrill says it continues to see strong demand for modern ultra-deepwater drilling rigs driven by high oil prices and large deep-water discoveries and increased development drilling. Specific interest, mainly from operators in West Africa and the Americas, demonstrate a trend towards higher day rates and longer term contracts.

“With yard costs at very attractive levels and Seadrill’s proven track record with respect to successful newbuild construction,” says the company, it “is pleased to announce the order of a sixth drillship from Samsung with delivery in the second quarter of 2014. The expected total project cost is less than $600 million, in line with the 5 units under construction and with delivery in 2013 and 2014. The yard contract was originally between a party related to Seadrill’s major shareholder, John Fredriksen controlled Hemen Holding, and Samsung, as part of a larger shipyard deal, but Seadrill has been given the right to take over the contract at original terms.

Seadrill’s current newbuild program now includes 17 units: six ultra deep-water drillships, one harsh environment semi submersible, five tender rigs and five jack ups, all to be delivered in the period from Q4 2012 to Q1 2015.

In addition, Seadrill has received a fixed price option for a further ultra deep-water drillship. The six drillships under construction are of the same design and will have a hook load capability of 1,250 tons and a water depth capacity of up to 12,000 feet targeting operations in areas such as the Gulf of Mexico, Brazil and West and East Africa. Also, these units will be outfitted with seven ram configuration of the Blow out Preventer (BOP) stack and with storing and handling capacity for a second BOP.

CEO of Seadrill Alf Thorkildsen says: “With the available capacity in 2013 and 2014 Seadrill is uniquely positioned among its peers to take advantage of strong demand for drilling services with high dayrates and longer charter contracts. We will continue to aggressively build Seadrill’s earnings and further expansion of the building program is expected in the months to come. Together, these developments provide for continued value creation and an increased dividend capacity.”

April 30, 2012