This 7.10% yielder is increasing its earning power. ((SeaDrill, SDRL, high dividend stocks))

SeaDrill is a high dividend stock currently yielding 7.10%.  It has an increasing earning power, but a little too much short term debt to make it a buy at today’s price of $36.61 per share.

SeaDrill (SDRL) just announced that it has a new contract with Thailand Chevron for its T12 tender rig.  The contract is for three years with a two year option.  The contract is worth approximately $132 million.  This will be the fifth SeaDrill rig that is contracted with Thailand Chevron.

Original article:

The T12 tender rig was built in 1Q2010 and went into contracted service with PTTEP for one year.  The existing contract ran from April 2010 to April 2011.  The dayrate in USD was $85,000.  That equates to approximately $31.025 million revenue per year from the T12 rig.

The new contract will increase T12 revenue generation by about 41%.  The new contract is for $132 million over three years.  That equates to about $44 million per year (+$12.975 million per year over the existing contract).  That also equates to a USD dayrate of about $120,500.

SeaDrill has a lot of short term debt.  If SeaDrill can deliver increased revenues with the rest of its fleet, then they might be able to pay down its short term debts to improve its balance sheet.  SeaDrill will be a worthy investment once they improve their balance sheet.

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Published in: on February 21, 2011 at 12:32 pm  Leave a Comment  

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