Seadrill Ltd (NYSE:SDRL) has been notified by Husky Oil Operations Limited (“Husky”) of the cancellation of the drilling contract for the West Mira (“The Unit”).
In the fourth quarter of 2012 Seadrill was awarded a 5 year contract for the West Mira with Husky for operations in Canada and Greenland. The total estimated base revenue potential was approximately $1 billion. As stated in the Company’s second quarter earnings report, due to the late delivery of the Unit, the Company had tentatively agreed with Husky to reduce the dayrate on the West Mira. The construction contract was subsequently cancelled by Seadrill due to the Shipyard’s inability to deliver the Unit within the timeframe required under the contract.
Seadrill remains in discussions with Husky to find an alternative solution to meet its drilling requirements. (Original Source)
Shares of Seadrill closed yesterday at $7.01. SDRL has a 1-year high of $28.67 and a 1-year low of $6.15. The stock’s 50-day moving average is $7.47 and its 200-day moving average is $10.15.
On the ratings front, Seadrill has been the subject of a number of recent research reports. In a report issued on September 3, Credit Suisse analyst Gregory Lewis downgraded SDRL to Sell, with a price target of $5, which represents a potential downside of 28.7% from where the stock is currently trading. Separately, on September 2, Canaccord Genuity’s Alex Brooks reiterated a Sell rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Gregory Lewis and Alex Brooks have a total average return of -14.2% and 23.4% respectively. Lewis has a success rate of 33.3% and is ranked #3642 out of 3768 analysts, while Brooks has a success rate of 83.3% and is ranked #661.
Seadrill Ltd provides drilling & well services to the offshore industry. It has a fleet of drilling units that is outfitted to operate in shallow water, mid-water and deepwater areas, in benign & harsh environments.