Seadrill to Receive 3-Rig Drilling Contract, Could be Valued at $4B

Norwegian oil-and-gas equipment company Seadrill Ltd. said it received a commitment from a major oil company for three newbuild drillships, which could be valued $4 billion.

Shares climbed 4.3% to $39.40 in premarket trading. The stock is up 14% so far this year.

The contract, which consists of 19 rig years, includes drillships West Auriga (UDW drillship), West Vela (UDW drillship) and a third drilling operating drilling unit which was unnamed. The first two drillships are under construction at Samsung Heavy Industries Co. Ltd. in South Korea. They will transition to the Gulf of Mexico upon delivery, which is scheduled for late February and May of next year. They are the fourth and fifth drillships delivered to Seadrill in the past four years and each will be equipped with 1,250 ton load capacity.

Seadrill said the depth of this contract commitment is a result of the company's record to deliver rigs on time and operate with a competent workforce.

"We are excited about the opportunity to further grow our fleet and operations in the Gulf of Mexico, which we consider as one of the most effective drilling regions," said Alf C. Thorkildsen, Chief Executive Officer.

Last quarter, the company's earnings slumped 53% as its better-than-expected revenue was masked by the sale of its Seawell subsidiary.

Copyright (c) 2012 Dow Jones & Company, Inc.

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