Keppel Corp

Keppel Corp: as flagged yday, KEP announces new contracts worth US$420m for two units of KFELS B Class jackups. The price tag at US$210m per rig is at a premium to the US$180-193m levels seen in 2011. The customer is Mexico’s national oil company, Pemex. Delivery is scheduled for 1Q15. The contract win would bring YTD contract win for Keppel to ~$10.7b, in line with expectations of $11.0b for 2012. This contract win follows closely after SMM’s contract win last week from Oro Negro for 2 jackup units, which would also be working for Pemex upon delivery. Oro Negro had said that Pemex would require about 60 jackup rigs over the next 5 years to reverse Mexico’s declining hydrocarbon production, raising the possibility of both KEP and SMM securing more Mexican offshore related contracts. KEP also mentioned in its press release that it has been seeing more enquiries from Mexico for new rigs. Maybank KE maintains Buy with TP $12.80.