Seadrill (SDRL) to Get $85M by Selling 3 Tender-Assist Rigs
Offshore drilling contractor Seadrill Limited SDRL has announced its plan to sell three tender-assist units, namely the West Vencedor, T-15, and T-16, to Energy Drilling Pte. Ltd. The sale will generate approximately $85 million in cash proceeds for Seadrill. The tender-assist units are specialized offshore vessels that could be deployed for development drilling, well completion as well as plug and abandonment.
The agreement stipulates that Edrill will take over the operations and marketing of these units, which are currently managed by the Singapore-based firm under existing agreements. The transaction is expected to be completed in the early third quarter of this year.
The sale of these units presents significant benefits for Seadrill. First, it allows the company to unlock value and generate substantial cash proceeds. This influx of cash will enhance Seadrill's financial position and provide flexibility for future investments and operations. It can be utilized for debt reduction, capital expenditures, or other strategic initiatives, thereby strengthening the company's overall financial stability.
Additionally, the sale aligns with Seadrill's strategic focus on optimizing its asset base. By divesting non-core assets such as the tender-assist units, Seadrill can streamline its operations and concentrate on high-grading its portfolio in an attempt to be more profitable.
Hamilton, Bermuda-based Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL has transformed its capital structure through accretive transactions and continues to deliver operational excellence. The Zacks Rank #1 (Strong Buy) company's sophisticated fleet of drilling rigs, together with its operational efficiency, positions it nicely to secure contracts in the expanding offshore market.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Energy Stocks to Buy
Apart from Seadrill, investors interested in the energy space might also look at operators like Profire Energy PFIE, Evolution Petroleum EPM and Smart Sand SND, each carrying a Zacks Rank #2 (Buy) currently.
Profire Energy: The 2023 Zacks Consensus Estimate for Profire Energy indicates 125% year-over-year earnings per share growth. PFIE has a trailing four-quarter earnings surprise of 11.1%, on average.
Profire Energy is valued at around $57.8 million. PFIE has seen its shares inch up 0.5% in a year.
Evolution Petroleum: It is valued at some $263.2 million. The Zacks Consensus Estimate for EPM’s fiscal 2023 earnings has been revised 20.7% upward over the past 60 days.
Evolution Petroleum, headquartered in Houston, TX, has a trailing four-quarter earnings surprise of roughly 38.4%, on average. EPM shares have gained 34.1% in a year.
Smart Sand: SND beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other. Smart Sand has a trailing four-quarter earnings surprise of 183.3%, on average.
SND is valued at around $67 million. Smart Sand has seen its shares drop 27% in a year.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Seadrill Limited (SDRL) : Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report
Profire Energy, Inc. (PFIE) : Free Stock Analysis Report
Smart Sand (SND) : Free Stock Analysis Report
