AWDR announced yesterday a 3 year contract (+ 2 year options) (LOI) for its 2nd gen. semi WilPhoenix with TAQA/Apache, UK. Contract value is stated at USD 424m, equivalent to a dayrate of USD 387.5k.
Start-up is expected in 2h14, depending on Premier’s exercise of options. We see the new contract as very supportive for the AWDR dividend case. According to estimates AWDR should be able to maintain quarterly dividends at USD1/s through 2015, equivalent to 60% of current MC. With basically 100% coverage through 2015, near to medium term risk is getting low.
Start-up of the new contract with TAQA/Apache is expected in 2h14 depending on Premier exercising options. Thus with the LOI WilPhoenix is on contract to 2h17. The contract dayrate of USD 387.5k compares to projections of 435k through 2016 and USD 250k beyond.
The UK market is basically sold out through 2014. Diamond Offshore’s 3rd gen. semi Ocean Princess is the only midwater rig available for 2013 and 2014. The 5th gen. UDW semi Eirik Raude will relocate to West Africa post completion of current contract with Exxon and is anyways competing in a different market.
Ten midwater floaters comes off contract by end 2015, excluding options, with 4 midwater floaters coming off by end 2016. A total of 7 new mutual contracts have been concluded YTD, with leading edge dayrate at USD 445k derived for the 6 months extension for Transocean’s 3rd gen. semi Sedco 704 with Mearsk. The 3 year contract for WilPhoenix is below the leading edge level, this is explained by the 3 year term.
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