Reuters logo
UPDATE 1-Ensco deepwater rig moving to Brazil, shares rise
February 2, 2011 / 6:33 PM / in 7 years

UPDATE 1-Ensco deepwater rig moving to Brazil, shares rise

* Analyst sees rig move as positive given long-term deal

* Ensco shares up 2.3 pct, reached highest since Oct. 2008

SAN FRANCISCO, Feb 2 (Reuters) - Offshore rig contractor Ensco Plc (ESV.N) struck a deal with Petrobras (PETR4.SA) to move a deepwater unit to Brazil from Australia to work for 950 days at $320,000 a day.

Ensco shares rose 2.3 percent.

“Brazil’s deepwater reserves are among the largest in the world and we seek to expand our presence in this growing market,” Ensco Chief Executive Dan Rabun said in a statement.

The London-based company did not even have any rigs in South America before striking a deal for Tullow Oil Plc (TLW.L) last month to sublet a permit-less Gulf of Mexico rig for work off the coast of French Guiana. [ID:nN01131883]

Ensco said on Wednesday it would book a $26 million demobilization fee from the Ensco 7500’s previous operator, Chevron Corp (CVX.N), in the fourth quarter. Ensco now sees revenue for that quarter at $400 million, versus the analyst average of $381 million, according to Thomson Reuters I/B/E/S.

UBS analyst Angie Sedita said the new dayrate for the 7500, which should start work in Brazil in the third quarter, is in line with her estimates. The rig is eligible for a 5 percent bonus and $19 million for mobilization and equipment upgrades, and Petrobras can extend the deal for another 950 days.

“Overall we view this as a positive given the long-term nature of the contract and the solid rate,” Sedita wrote in a note to clients.

Shares of Ensco were up 2.3 percent at $54.28 in early afternoon trading on the New York Stock Exchange. The stock peaked at $55.38 in early trading, its highest level since October 2008. (Reporting by Braden Reddall, editing by Gerald E. McCormick)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below