IPO News: Seadrill Comes Out Swinging

Seadrill’s West Polaris drillship. Photo: Seadrill

Seadrill Partners opened at $24 on the New York Stock Exchange, up 9.1% from its offer price of $22.

The company’s initial public offering of 8.75 million common units priced at $22 apiece, the high end of its expected range.

The limited-liability company–formed by Norwegian oil-services company Seadrill Ltd. (SDRL, SDRL.OS) to own, operate and acquire offshore drilling rigs–said last week it expected its debut to price at $20 to $22 a unit. The company had initially filed plans last month for an estimated IPO of up to $225 million.

Seadrill Partners has said it will use the proceeds to buy from Seadrill Ltd. interests in Seadrill Operating LP and Seadrill Capricorn Holdings LLC, which own and operate Seadrill Partners’s offshore drilling rigs.

After the offering, Seadrill Partners will own a 30% stake in Seadrill Operating and a 51% stake in Seadrill Capricorn Holdings.

The company’s drilling rigs are under long-term contracts with major oil companies such as Chevron Corp. (CVX), Total S.A. (TOT, FP.FR), BP PLC (BP, BP.LN) and Exxon Mobil Corp. (XOM), with an average remaining term of 3.1 years as of June 30.

Seadrill Partners’s profit for the six months ended June 30 rose 5.6% to $93.9 million, as revenue increased 11% to $275.2 million.

Seadrill Ltd. in August reported its second-quarter earnings fell 14%, as higher operating expenses masked the company’s 13% rise in revenue.

The company is trading on the New York Stock Exchange under the symbol SDLP and closed the day at $24.12 after hitting a high of $25.16.

-Melodie Warner from Dow Jones Newswires contributed to this article. Copyright © 2012 Dow Jones Newswires