SDRL stock is gaining solid momentum this morning after Seadrill Ltd (NYSE:SDRL) formed a 50-50 joint venture with Sonangol, securing a nine-well contract.
Key Details
As an offshore drilling company, Seadrill has made some highly impressive moves over the past few weeks. For an offshore oil driller, the main currency is the number of lucrative contracts it holds and hence today’s announcement is so crucial. The company today announced that it has entered into a lucrative joint venture with Sonangol, by of which it has been awarded a nine-well contract in Angola. The contract also has six options in total, and each of those is for one of those wells. The drilling is going to take place for the drillship named Sonangol Libongos.
However, it is the size of the contract that is more important, and that is what makes this development such a significant one for Seadrill. According to Seadrill, the total value of the contract stands at a handsome $101 million, and more importantly, it is going to run for until 2021.
Following this significant deal, SDRL stock is soaring by as much as 10% at $2.50.
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Work is going to commence at some point in the third quarter of 2019. On the other hand, it has also been revealed that the day rate of the drillship is $204,000 for a total duration of 495 days.
JV with Qatar Drilling
However, this is not the only important and suitably large contract that Seadrill has signed recently. Last month the company entered into a joint venture with Qatar Drilling International. The oil rig venture is meant for oil exploration for Qatar Petroleum, the powerful and influential oil company owned by the Qatar Government. The work on the contract is going to begin next year and is going to run until 2024.
That being said, it is the total value of the contract that is most important. The value of the contract is $656 million, and it could prove to be a major springboard to success for Seadrill and SDRL stock.
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