Seadrill (NYSE:SDRL) has entered into an agreement to sell the newly built jack-up drilling rig West Juno to an undisclosed buyer incorporated in UK for a total consideration of US$248.5 million.
Seadrill expects to record a gain on sale of approximately US$18 million on closing. Closing of the agreement and the transfer of ownership of the unit is scheduled upon completion of the rig's present drilling assignment late second quarter or early third quarter 2011. Seadrill expects to have an EBITDA contribution from the rig in the period up to closing of approximately US$6 million.
Alf C Thorkildsen, CEO of Seadrill Management AS, says, "We are continuously evaluating sale and purchase opportunities in order to maximize the long term return for our shareholders. This dynamic approach can from time to time lead to divestments and reallocation of capital. We have through the sale of West Juno at an attractive price been able to monetize the underlying strength of the jack up market. Although we remain optimistic on the market outlook for premium jack-up rigs, we have decided to relocate the proceeds to fund investment in other new unit as we since October 2010 have committed to investing US$4.7 billion in newbuildings."
Seadrill's fleet of jack-up rigs remains the world largest modern jack-up fleet with a total of 19 units built after 2006. Furthermore Seadrill has options for construction of further six units at attractive prices compared to going market prices.