Cosco: Seadrill enters into agreement with Cosco Nantong Shipyard to build 2 tender rigs for total project price of US$225 (incl project mgt, drilling & handling tools, spares and capitalized interest). The units are scheduled for delivery in 1Q and 3Q13. Cosco has not yet made an official announcement.
A tender rig is used mainly to provide auxiliary services. It contains living quarters, storage for drilling supplies, power machinery for running the drilling eqpt, helicopter deck and well completion eqpt.
We believe the mkt will view this order win positively, as it indicates Cosco is making progress in carrying out its offshore ambitions. This segment is potentially higher margin than its current mainstay in shipbuilding.
Stock last closed at $1.96, down ~20% from mid-Jan’s 2-yr high.
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