Seadrill Partners LLC – a subsidiary set up by Norwegian oilfield service firm Seadrill Limited (SDRL) – announced the filing of registration statement for an initial public offering (:IPO) of its common units with the Securities and Exchange Commission.
Seadrill Partners expects to raise up to $225 million through the offering but neither did it disclose the number of units to be offered nor the price range for the offering. The company aims to utilize the proceeds from the offering to buy stakes in Seadrill Operating LP and Seadrill Capricorn Holdings LLC from the parent company.
Seadrill Partners – which will own, operate and purchase offshore drilling rigs via long-term contracts – intends to be listed on the New York Stock Exchange under the ticker name ‘SDLP’.
The start-up fleet of Seadrill Partners will likely comprise two semi-submersible rigs (West Capricorn and West Aquarius), one drillship (West Capella) and one tender rig (West Vencedor). The company’s drillships are contracted by oil biggies Chevron Corporation (CVX), Total S.A. (TOT), BP plc (BP) and Exxon Mobil Corp. (XOM).
Based in Hamilton, Bermuda, Seadrill Limited renders offshore drilling services, which include drilling, completion, and maintenance of offshore wells; production drilling and well maintenance; and well services to customers worldwide. As of June 30, 2012, the company’s fleet included 43 offshore drilling units and 18 additionally units under construction.
Although the offshore drilling industry fundamentals and outlook remains attractive, owing to greater exploration activities and increased spending, we remain apprehensive that the company’s performance may face a number of headwinds, including commodity price fluctuation, geopolitical risk, competition, the emergence of new technology and changes in economic conditions.
Seadrill Limited retains a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months.
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