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Seadrill (SDRL) Initiates Qatar Jack-Up Fleet Sale for $338M
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Seadrill Limited (SDRL - Free Report) has signed an agreement to sell off three of its jack-up rigs, also known as Qatar jack-up fleet, along with its 50% equity interest in the joint venture that operates these rigs, to Gulf Drilling International (GDI). Seadrill’s joint venture partner GDI will be taking over the three rigs, West Castor, West Telesto and West Tucana, and the venture in exchange for cash proceeds worth $338 million.
SDRL has stated that the divestiture aligns with its overall strategy to simplify its business and concentrate only on its core operations, which is operating deepwater rigs across Golden Triangle and other regions that have similar advantages. Management believes that the market outlook for deepwater floaters appears positive and it holds a competitive position in the deepwater drilling business.
The company plans to utilize the cash proceeds from the deal to strengthen its balance sheet and liquidity position. The deal is slated to be completed early in the third quarter of 2024. The transaction is contingent upon the approval of Qatar Financial Centre Authority and the shareholders of GDI’s parent company.
At the same time, SDRL’s board has also increased the company’s aggregate share repurchase authorization. Per the announcement, the company will be able to repurchase up to an additional $500 million worth of its outstanding common shares over a two-year period. The extended repurchase period will begin after the current share repurchase program is concluded.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Eni is a leading global integrated energy company with a prominent focus on liquefied natural gas businesses. As natural gas has a lesser carbon footprint compared with other fossil fuel, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it capitalize on the mounting global demand in the future.
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Seadrill (SDRL) Initiates Qatar Jack-Up Fleet Sale for $338M
Seadrill Limited (SDRL - Free Report) has signed an agreement to sell off three of its jack-up rigs, also known as Qatar jack-up fleet, along with its 50% equity interest in the joint venture that operates these rigs, to Gulf Drilling International (GDI). Seadrill’s joint venture partner GDI will be taking over the three rigs, West Castor, West Telesto and West Tucana, and the venture in exchange for cash proceeds worth $338 million.
SDRL has stated that the divestiture aligns with its overall strategy to simplify its business and concentrate only on its core operations, which is operating deepwater rigs across Golden Triangle and other regions that have similar advantages. Management believes that the market outlook for deepwater floaters appears positive and it holds a competitive position in the deepwater drilling business.
The company plans to utilize the cash proceeds from the deal to strengthen its balance sheet and liquidity position. The deal is slated to be completed early in the third quarter of 2024. The transaction is contingent upon the approval of Qatar Financial Centre Authority and the shareholders of GDI’s parent company.
At the same time, SDRL’s board has also increased the company’s aggregate share repurchase authorization. Per the announcement, the company will be able to repurchase up to an additional $500 million worth of its outstanding common shares over a two-year period. The extended repurchase period will begin after the current share repurchase program is concluded.
Zacks Rank and Key Picks
Currently, SDRL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Archrock Inc. (AROC - Free Report) , SM Energy (SM - Free Report) and Eni SpA (E - Free Report) . Archrock and SM Energy presently sport a Zacks Rank #1 (Strong Buy) each, while Eni carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Eni is a leading global integrated energy company with a prominent focus on liquefied natural gas businesses. As natural gas has a lesser carbon footprint compared with other fossil fuel, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it capitalize on the mounting global demand in the future.