Asset/portfolio management

Seadrill Offloads Jackup Fleet to Joint Venture Partner

The contractor sells rigs and Qatar JV stake to Gulf Drilling International in $338 million deal.

Seadrill drillship West Capella recently secured a one-well contract in South Korea valued at around $32 million.
SOURCE: Seadrill

Offshore drilling contractor Seadrill Ltd. has entered into a definitive agreement to sell its Qatar jackup fleet—comprising the West Castor, West Telesto, and West Tucana—and its 50% equity interest in a joint venture that operates these rigs offshore Qatar to its joint venture partner Gulf Drilling International (GDI) for $338 million.

The all-cash transaction is subject to certain conditions, including approval or non-objection of the Qatar Financial Centre Authority and approval of the shareholders of GDI’s parent company, and is expected to close early in the third quarter of 2024.

“Our divestiture of the Qatar jackup fleet and exit from the joint venture are consistent with our ongoing efforts to strengthen and simplify our business and will allow us to focus on Seadrill’s core business: operating deepwater rigs across the Golden Triangle and similarly advantaged geographies,” said Simon Johnson, Seadrill president and CEO. “We believe that our strengthened liquidity position upon completion of the jackup sale, coupled with our conviction in the deepwater floater market outlook and Seadrill’s competitive positioning within it, supports the expansion of our share repurchase program.”

Post-divestment, Seadrill will operate 15 drilling rigs, consisting mainly of deepwater drillships and semisubmersibles, including two harsh environment units.

Concurrent with the announcement of the transaction, Seadrill announced its board of directors has increased the company’s aggregate share repurchase authorization, allowing the company to repurchase up to an additional $500 million of its outstanding common shares over a 2-year period after the current share repurchase program is completed.

Earlier this month, Seadrill announced fresh commitments for a pair of its floating rigs. The West Capella secured a one-well contract in South Korea, with an estimated duration of 40 days, valued at approximately $32 million, including a mobilization fee of $10 million and excluding fees for additional services. The contract is expected to start in December 2024.

Meanwhile, the West Neptune secured a 6-month contract extension with an independent operator in the US Gulf of Mexico, expected to start in the third quarter of 2025 in direct continuation of its current contract. The estimated contract value of approximately $86 million excludes fees for additional services, including managed pressure drilling (MPD).

Seadrill will upgrade the West Neptune with MPD capabilities during planned out-of-service periods, making it the tenth rig in the company’s fleet with MPD or MPD-equivalent technologies.