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SeaDrill Limited JV Starts Petrobras Work Before Schedule

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On Jul 3, offshore drilling firm SeaDrill Limited (SDRL - Free Report) announced that Sapura Navegacao Maritima, a joint venture with the integrated oil and gas company SapuraKencana Petroleum Berhad, has started operations of Sapura Diamante, a pipe-laying support vessel (PLSV).

The PLSV is the first of six units that has been contracted by Petroleo Brasileiro SA or Petrobras (PBR - Free Report) . The contract is initially for a 5-year period and has a revenue potential of $445 million. SeaDrill Limited also has an option to extend this contract for another 5-year period.

SeaDrill Limited added that the PLSV has started operations three months before the stipulated period, which indicate the company’s dedication toward delivering quality units. The company also stated that increasing its operating fleet in Brazil is an effort to widen its exposure in the region and establish a strong foothold in the South American market.
Hamilton, Bermuda-based SeaDrill Limited primarily provides services related to offshore drilling activities to customers worldwide. Currently, the company is operating about 69 drilling units that include drillships, jackups, semi-submersibles and tender rigs.

The company has, however, not fared well in the past few quarters. In first-quarter 2014, SeaDrill Limited reported earnings per share of 59 cents, missing the Zacks Consensus Estimate by 11 cents. For the upcoming quarter too, things look bleak. The consensus estimates for the current quarter as well as the current year have moved lower in the past one-month time frame.

SeaDrill Ltd. currently has a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the same industry like Parker Drilling Co. (PKD - Free Report) and Helmerich & Payne Inc. (HP - Free Report) . Both these stocks have a Zacks Rank #2 (Buy).

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