Monday, July 25, 2011


SembMarine: Upstream reports that Songa Offshore has secured a contract for the ultra-deepwater semi-sub rig Songa Eclipse newbuild that is set to roll out of SMM's Jurong Shipyard in Aug. Highlights the US$268m 1 yr contract for the rig is believed to have laid the groundwork for potential fleet expansion at Songa.

Upstream understands that Songa had enquired about both the mid-water Moss Maritime CS40 design semi-sub and CS50 deep-water version. SMM is currently building 2 Moss Maritime CS50 ultra-deepwater semi-sub for SeaDrill. While JPM recently highlighted Jurong Shipyard is still in running for Songa's 2 semi-sub orders with a potential order size of US$2-2.5b.

SMM’s YTD order wins of $2.2b pales in comparison to Keppel’s $7.4b, but the former could soon play catch up if its order momentum picks up. Recall, SMM recently secured a $600m contract from PTTEP for a processing platform.

The majority of the Street has Buy ratings on SMM, with recent TP btwn $6.30-6.80.

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