Keppel Corp: secures another jackup contract, this time with Dynamic Offshore to build its first KFELS B Class jackup drilling rig for US$180m. The rig is slated for delivery in 1Q13, and will be able to operate in water depths of 350 ft with a drilling depth of 30k ft and accommodate 120 men. Dynamic also has an option to build an additional rig to be exercised before 3Q11...
This order reinforces the buoyancy of the offshore market. Ytd, KEP has won contracts for 20 jackups worth ~$6.5b. Including options for another 15 jackups worth ~$4b, total orders secured in FY11 may exceed ~$10b. This compares with current Street forecasts for $7-8b of orders in FY11E.
Stock trades at 11.9x P/E. The majority of the Street has Buy ratings with recent TP ranging btwn $12.12 – 14.
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