Keppel Corp

Keppel Corp: Secured a contract worth US$227mn from Gulf Drilling International (GDI) of Qatar to build a repeat KFELS B Class jack-up rig, scheduled for delivery in 1Q16. Upon delivery, the jack-up rig will be chartered to Qatar Petroleum for five years. As part of the contract, GDI has options for two more KFELS B Class rigs for deliveries in 2017. The contract value is slightly higher than that of the KFELS B Class orders received by Keppel earlier this year (US$217-218mn), mainly due to the accelerated delivery, i.e. Keppel has started the rig construction prior to the contract signing With this contract, Keppel has secured YTD new orders of US$2.7bn or 56% of GS FY14E new orders forecast. If the second FLNG order which could potentially be finalized by Oct-14 (as stated by Keppel) is included, Keppel YTD new orders would reach US$3.5bn or 72% of GS FY14E new orders forecast. Current order book is estimated to stand at $14.4 with deliveries up to 2019. Keppel is currently trading at 1.9x P/B with 18 Buys & 9 Holds