Seadrill Limited (NYSE:SDRL) rose Friday after the company announced it was teaming up with Gulf Drilling for a $665-million contract in Qatar.
Their 50:50 joint venture, GulfDrill, will initially manage and operate five premium jackups in Qatar with Qatar Petroleum starting throughout 2020.
GulfDrill will initially bareboat charter the West Telesto and West Castor from Seadrill and has secured bareboat charters for three additional units from a third-party shipyard.
The five firm well-based contracts will have staggered commencements throughout 2020 with initial terms concluding in 2023 and 2024, respectively.
Seadrill said the total contract value is expected to be $656 million (including mobilization fees). Each contract has five one-well options which could add up to an estimated 13.7 cumulative years of term and an additional contract value of $700 million.
CEO Anton Dibowitz said: "GulfDrill will give us the opportunity to improve our access to a market that is expected to show significant growth over the next years and strengthen our relationship with Qatar Petroleum."
Seadrill shares approached noon ET Friday up 60 cents, or 28.7%, to $2.69.
