Join our crew and become one of the 104,022 members that receive our newsletter.

Sete Brasil’s Drillship Order a “Pleasant Surprise”

Sete Brasil’s Drillship Order a “Pleasant Surprise”

Dow Jones
Total Views: 7
November 30, 2012

The new rig is based on Jurong Shipyard’s proprietary Jurong Espadon drillship design. Image: SembMarine

[Dow Jones] SembMarine’s (S51.SG) new drillship order from Sete Brasil for US$806 million was a pleasant surprise, Barclays says.

“The seventh drillship order from Sete Brasil demonstrates its confidence in Sembcorp Marine delivering on its drillship orders. This new order is expected to be delivered by 3Q16, ahead of the previous order’s first delivery in 1Q17.”

It notes the contract price is a slight premium over the first two orders at US$793 million and US$805 million.

“With a higher contract value and the likely improvement in margins from a repeat design, we would expect the margins to improve on the second and following units.” Barclays expects SembMarine’s order momentum to pick up going into 2013, with the likely return of drilling semi-sub orders. It rates the stock at Overweight with S$6.50 target. “Sembcorp Marine is our preferred pick in the rig-building space,” it says.

“With Sembcorp Marine’s shares trading at 11X 2013E P/E, we believe valuations remain attractive for a pure-play rig-builder leveraged to a continued increase in oil industry spending.” The stock is up 4.6% at S$4.58.

(c) 2012 Dow Jones & Company, Inc.

Weekly Insights from the Helm

Dive into a sea of information with our meticulously curated weekly “Dispatch” email. It’s more than just a newsletter; it’s your personal maritime briefing.

Sign Up
Back to Main
polygon icon polygon icon

Why Join gCaptain Club?

Be Informed: Stay updated with the latest maritime news and trends.

Connect: Network with a community of maritime professionals and enthusiasts.

Gain Insights: Receive exclusive content and personal perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 104,022 members delivered daily straight to your inbox.

Join Our Crew

Join the 105,000 members that receive our newsletter.