Seadrill to buy Ultradeepwater rig from Songa for $590 million

11/19/2012

Seadrill to buy ultradeepwater rig from Songa for $590 million

BY BEN FOX RUBIN

STAVANGER -- Seadrill said it agreed to buy the ultradeepwater semisubmersible rig Songa Eclipse from Songa Offshore for $590 million, giving Seadrill increased exposure to the ultradeepwater market. The Norwegian oil services company said it intends to take delivery of the rig in december and expects the acquisition to have an immediate impact on cash flow and financial results.

"This investment is in line with our strategy of building a modern fleet through selective acquisitions and organic growth. The ultradeepwater market is in a strong cycle, something we expect to prevail over the coming years," Fredrik Halvorsen, chief executive of Seadrill Management, said.

The rig was delivered from the Jurong Shipyard in Singapore in 2011 and is currently operating for Total off the shores of Angola on a fixed contract ending December 2013. Total has three to one year options to extend the contract. The rig has the same design as four of Seadrill's existing rigs. The Seadrill,which provides drilling and well services, focuses on deepwater drilling. In August, the company said its second quarter earnings fell as higher operating expenses masked the company's rise in revenue.

Dow Jones Newswires

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