Seadrill completes sale of jack-up rigs for $338 million via Investing.com
HAMILTON, Bermuda – Seadrill Limited (NYSE & OSE: SDRL), a deepwater drilling contractor, has completed the sale of three of its jack-up rigs and a 50% stake in the Gulf Drilling International joint venture. The transaction, which includes the rigs West Castor, West Telesto, and West Tucana, was for a total of $338 million.
These rigs, which were used offshore Qatar, are now under the ownership of a former partner of Seadrill. The move comes as part of Seadrill’s strategic efforts to streamline its operations and assets.
Jack-up rigs are mobile drilling structures with retractable legs that can be lowered to the seabed, providing a stable platform for drilling for oil and gas in very shallow waters. They are an important part of offshore drilling operations.
Seadrill, known for its modern vessels and use of advanced technology, specializes in providing offshore drilling services to the oil and gas industry. The company emphasizes safety, efficiency, and responsible mining practices in its operations.
Financial details of the transaction were not disclosed beyond the sale price. It is not clear whether the sale will have a significant impact on Seadrill’s financial position or its operating capabilities.
The sale is part of Seadrill’s broader strategy to develop its portfolio and focus on its core expertise in deepwater drilling. The company continues to serve national, integrated and private oil companies, providing access to energy resources around the world.
In other recent news, Seadrill Ltd. reported strong earnings for the first quarter of 2024, with revenue at $367 million and EBITDA at $124 million. The company has also made significant strategic moves, including the sale of three rigs and a 50% stake in the Gulfdrill joint venture to Gulf Drilling International (GDI) for $338 million. The transaction, which exceeded Stifel’s initial estimate of $300 million, is expected to be completed by the beginning of the third quarter of 2024.
Alongside the rig sale, Seadrill has increased its share repurchase program by an additional $500 million, reflecting confidence in its financial stability and future prospects. This latest development is part of the company’s strategy to focus on its core deepwater operations and upstream asset portfolio.
Stifel, which reiterated a buy rating on Seadrill and maintained a $73.00 price target, views these strategic decisions favorably. These moves are expected to shape Seadrill’s financial position and focus on operations, while returning value to its shareholders.
InvestingPro Insights
Due to the recent sale of assets of Seadrill Limited, current and potential investors may receive some interest regarding the company’s financial health and market performance. According to real-time data from InvestingPro, Seadrill’s market capitalization stands at a solid $3.37 billion. This valuation is supported by a Price to Earnings (P/E) ratio of 11.65, which is also adjusted for a slightly more attractive 10.27 when considering the trailing twelve months from Q1 2024.
From a growth perspective, Seadrill has shown a significant increase in revenue, with an increase of 58.45% in the last twelve months leading to Q1 2024. This increase is also reflected in the company’s quarterly revenue growth of 32.81% in Q1 2024. The figures suggest strong financial performance. and may reflect a positive outlook on the company’s future profitability.
Investors may also be encouraged by Seadrill’s gross profit margin, which stood at 37.92% during the same period, indicating the company’s ability to manage its cost of goods sold effectively. Additionally, with an operating income of 23.84%, Seadrill appears to be maintaining healthy efficiency.
For those looking for more information and analysis, InvestingPro offers additional advice on Seadrill and other companies in the industry. Subscribers can access these valuable tips to inform their investment decisions. In addition, by using a coupon code PRONEWS24, new subscribers can get an additional 10% off Pro and Pro+ annual or bi-annual subscriptions, which unlock expert financial analysis and tips. Currently, there are more than 10 InvestingPro tips available on Seadrill, which can provide a deep dive into the company’s financials and market dynamics.
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