Seadrill to Build Four New UDW Drillships (South Korea)

Seadrill Limited has entered into turnkey contracts to build four new ultra-deepwater drillships. Two drillships will be built at the DSME yard and the other two at the Samsung yard, in South Korea.

The project value price is estimated to be below US$600 million per unit (including project management, drilling and handling tools, spares, capitalized interest and operations preparations). Delivery of the 4 units is scheduled for the second half 2015. Seadrill has in addition received fixed priced options for delivery of two further units for delivery in the first half 2016.

The drillships will have a hook load capability of 1,250 tons and a water depth capacity of up to 12,000 feet targeting operations in areas such as the Gulf of Mexico, Brazil and West and East Africa. Also, these units will be outfitted with seven ram configuration of the blowout preventer (BOP) stack and with storing and handling capacity for a second BOP. The units include design and equipment features, which makes them particularly attractive for development drilling. For two of the drillships, Seadrill has received options to include equipment which makes the units prepared for 20K BOP systems.

Seadrill’s construction program now totals 22 units, including 9 drillships, 2 harsh environment semi-submersibles, and 11 high specification jack-ups. In addition the Company has fixed priced options for two ultra-deepwater units.

The Company added: “We expect that the four newbuilds can be fully financed through a combination of available cash and structured debt facilities, and that no additional equity or reduction in dividend capacity will be needed to support and complete the project. Longer term, the additional drilling units are likely to increase Seadrill’s dividend capacity.”

John Fredriksen, Chairman of Seadrill Limited, says: “We have been able to use the current weakness in the shipbuilding industry to order drilling units at very attractive price levels. At the same time we are securing future growth by continuing to build a homogenous fleet with all the operational benefits which come from fleet standardization.

“Through this latest newbuild order Seadrill remains uniquely positioned as a high growth – high dividend stock.”

July 15, 2013

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