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Seadrill Lands Two Drillship Contracts in Brazil, Boosts Order Backlog
SDRLSeadrill(SDRL) ZACKS·2024-12-26 19:10

Seadrill Limited (SDRL) Contracts and Market Position - Seadrill Limited secured a contract from Petrobras for its West Tellus drillship to work on the Sépia and Atapu fields in the Santos Basin, Brazil [1] - The West Tellus contract has a duration of 1,095 days and is expected to contribute approximately 498milliontothecompany′sorderbacklog,excludinga498 million to the company's order backlog, excluding a 41 million mobilization fee [8] - Seadrill also secured a contract for its West Jupiter drillship with Petrobras, valued at 493millionover1,095days,excludinga493 million over 1,095 days, excluding a 31.5 million mobilization fee [9] - The new contracts add approximately 1billiontoSeadrill′sorderbacklog,potentiallyboostingearningsandfreecashflowin2026[5]−SeadrilloperatessixdrillshipsinBrazil,positioningthecompanystronglyinthedeepwatermarketwithlong−termcontractsensuringsteadyearnings[10]EnergySectorandCompetitors−TechnipFMCplc(FTI)andOceaneeringInternational(OII)holdaZacksRank1(StrongBuy),whileNineEnergyService(NINE)holdsaZacksRank2(Buy)[6]−NineEnergyServiceprovidesonshorecompletionandproductionservicesacrosskeybasinsintheUSandCanada,withanticipatedgrowthduetosustaineddemandforoilandgas[7]−OceaneeringInternationaldeliversintegratedtechnologysolutionsfortheoffshoreoilfieldlifecycle,supportingsteadyrevenuegrowththroughclientretentionandnewbusinessopportunities[11]−TechnipFMC′stotalbacklogreached1 billion to Seadrill's order backlog, potentially boosting earnings and free cash flow in 2026 [5] - Seadrill operates six drillships in Brazil, positioning the company strongly in the deepwater market with long-term contracts ensuring steady earnings [10] Energy Sector and Competitors - TechnipFMC plc (FTI) and Oceaneering International (OII) hold a Zacks Rank 1 (Strong Buy), while Nine Energy Service (NINE) holds a Zacks Rank 2 (Buy) [6] - Nine Energy Service provides onshore completion and production services across key basins in the US and Canada, with anticipated growth due to sustained demand for oil and gas [7] - Oceaneering International delivers integrated technology solutions for the offshore oilfield lifecycle, supporting steady revenue growth through client retention and new business opportunities [11] - TechnipFMC's total backlog reached 14.7 million in Q3 2024, an 11.1% increase year-over-year, indicating strong revenue growth prospects [12] Industry Outlook - The offshore drilling market remains resilient, with Seadrill's contracts highlighting the continued demand for deepwater drilling services [1][5][10] - Companies like Nine Energy Service and Oceaneering International are well-positioned to benefit from the ongoing demand for oil and gas services [7][11]