HAMILTON, Bermuda - Seadrill Limited (NYSE & OSE: SDRL), an offshore drilling contractor, has announced the award of contracts for two of its drillships, reflecting the company's ongoing business activities in the offshore drilling sector.
The company's West Capella drillship has been contracted for a one-well project in South Korea, scheduled to begin in December 2024. The 40-day contract is valued at approximately $32 million, which includes a mobilization fee of about $10 million, but does not account for fees related to additional services.
Additionally, the West Neptune drillship has secured a six-month extension for its services with an independent operator in the U.S. Gulf of Mexico. This extension is set to commence in the third quarter of 2025, immediately following the end of its current contract.
The value of this extension is estimated at $86 million, excluding additional service fees. Notably, Seadrill plans to enhance the West Neptune with managed pressure drilling (MPD) capabilities during planned out-of-service periods. Once upgraded, the West Neptune will be the tenth rig in Seadrill's fleet equipped with MPD or MPD-equivalent technologies.
Seadrill is recognized for utilizing advanced technology to access oil and gas resources in a variety of locations worldwide. Its fleet, known for its high quality and technological sophistication, is operated by experienced crews capable of working in diverse geographic and environmental conditions, from shallow waters to ultra-deepwater areas.
InvestingPro Insights
Seadrill Limited (NYSE & OSE: SDRL), with its recent contract awards, showcases a robust business model in the offshore drilling sector. The company's financial and operational performance can be further illuminated by examining key metrics from InvestingPro. Seadrill's adjusted market capitalization stands at $3.56 billion, a testament to the company's scale in the industry. Investors may find the Price to Earnings (P/E) ratio particularly insightful; the adjusted P/E ratio for the last twelve months as of Q4 2023 is 11.55, suggesting that the company's earnings are a driving factor behind its stock price. Moreover, the impressive revenue growth of 50.46% over the last twelve months indicates a strong upward trajectory in Seadrill's financial performance.
Two "InvestingPro Tips" highlight the company's potential for investors. First, Seadrill's Price to Book (P/B) ratio of 1.2 as of the last twelve months ending Q4 2023, combined with a significant one-year price total return of 36.1%, suggests that the company's stock might be trading at a value attractive to growth-oriented investors. Additionally, the "InvestingPro Fair Value" is estimated at $71.32, which exceeds the current price, indicating potential undervaluation according to InvestingPro's proprietary models.
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