Photo: West Ariel; Source: Seadrill

Hat-trick award to bring $404 million to Seadrill

Offshore drilling contractor Seadrill has secured new contracts totalling $404 million for three jack-up rigs in the Middle East. This is Seadrill’s third contract announcement this week.

The latest contract awards, announced by Seadrill on Thursday, came in from “a leading operator” for the West Ariel, West Cressida, and West Leda rigs for work in the Middle East. The operator is Saudi Aramco.

According to Seadrill’s latest fleet status report, all three rigs have been inactive for quite some time and the first rig is in the UAE while the other two are in Malaysia.

The firm term of each contract is three years with an expected start between 1Q 2023 and 2Q 2023. The total contract value for the three contracts is approximately $404m (inclusive of mobilization revenue).

Upon commencement of the three contracts, Seadrill will operate seven units directly and have a further three units on a bareboat charter in the Middle East. Seadrill has a long track record in the Middle East, providing operations since 2013.

West Cressida; Source: Seadrill
West Cressida; Source: Seadrill

Simon Johnson, Seadrill Chief Executive Officer, commented, “With our imminent re-listing in Oslo, news of this award confirms Seadrill’s status as a preferred partner in a rapidly recovering rig market. Upon commencement of operations early next year, these rigs will add to Seadrill’s strong market share in the Middle East, leading to significant economies of scale by clustering rigs of similar design in a market segment where we see strong signs of recovery and long-term demand.”

Also on Thursday, Seadrill started trading its common shares on Euronext Expand. Seadrill is expected to uplist to the main market of the Oslo Stock Exchange and the New York Stock Exchange later this year. The company’s shares were delisted from trading on Oslo earlier this week. The relisting updates came about two months after Seadrill emerged from Chapter 11 bankruptcy.

Also this week, the rig owner’s JV in Angola with Sonangol secured a 10-well contract with options for up to 8 additional wells for the West Gemini drillship.

In addition, the drillship West Neptune and the semi-submersible Sevan Louisiana this week won new contracts with a total value of $105 million for operations in the Gulf of Mexico.