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Seadrill (SDRL) Unit To Buy Ultra-Deepwater Semi-Submersible Rig Songa Eclipse For $590M

 November 16, 2012 09:58 AM


(By Balaseshan) Seadrill Ltd. (NYSE: SDRL), an offshore drilling contractor, said its subsidiary has agreed to buy the ultra-deepwater semi-submersible rig Songa Eclipse from Songa Offshore for $590 million consideration.

The rig was delivered from the Jurong Shipyard in Singapore in 2011, and is currently operating for Total offshore Angola on a fixed contract ending in December 2013.

In addition, Total has three one-year options to further extend the contract. Seadrill plans to take delivery of the rig during December 2012 after which it will have an immediate impact on Seadrill's cash flow and financial results.

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"This investment is in line with our strategy of building a modern fleet through selective acquisitions and organic growth. The ultra-deepwater market is in a strong cycle, something we expect to prevail over the coming years and the acquisition increases our exposure to this segment," said Fredrik Halvorsen, Chief Executive of Seadrill Management AS.

Songa Eclipse is of the same design, Friede & Goldman ExD millenium, as four of Seadrill's existing rigs in operation, West Sirius, West Taurus, West Orion and West Capricorn.

The rig is dynamically positioned (DP 2 class certification) and equipped with Aker Solutions drilling equipment and have water depth capability up to 10,000-feet and drilling depth capacity of up to 37,500-feet. The subsea well control system includes a six-ram 15,000 psi BOP stack.

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"Furthermore, we are pleased to strengthen our relationship with Total in Angola, and increase our presence in the region, which adds scale to our operations and could further reduce our relative cost base in the region," said Halvorsen.

SDRL closed Thursday's regular session down 0.82% at $37.51. The stock has been trading between $31.02 and $42.34 for the past 52 weeks.

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