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Seadrill Ltd. SDRL, an offshore drilling contractor, is preparing for its upcoming assignment with Petrobras offshore Brazil, scheduled to begin in the fourth quarter of 2024. The West Auriga and West Polaris drillships have rejoined the company’s fleet and are undergoing the final preparations, including inspections and maintenance, ahead of their campaign in Brazil. Prior to this, the drillships were supervised by third-party managers.
Details of the Drillships
The West Auriga is a seventh-generation ultra-deepwater drillship with a maximum drilling depth of 37,500 feet and can operate in water depths of up to 12,000 feet. The West Polaris is a sixth-generation ultra-deepwater drillship with a maximum drilling depth of 37,500 feet and can operate at a depth of 10,000 feet underwater. Both drillships were constructed by Samsung in South Korea.
SDRL’s Contract With Petrobras
Petrobras had awarded a fixed-term contract of 1,064 days to each of the drillships in December 2023. SDRL mentioned that the contracts were valued at $1.1 billion, including mobilization fees and other additional services. The drillships are going through the client acceptance process before embarking on the project with Petrobras in Brazil.
The offshore drilling contractor mentioned that the drillships are fully utilizing the time they have out of service and making their final preparations to ensure optimal performance. The vessels have been recently painted, which not only gives them a fresh look but also protects them from corrosion, thereby extending their service lifespan.
SDRL’s Zacks Rank and Key Picks
Currently, SDRL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, providing a positive outlook.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.