Seadrill secures contracts for multiple jack-up units Seadrill has secured new contracts for four jack-up units and the contract for the West Mischief has been extended by four months. The total revenue potential for the four new contracts and one extension is approximately $319M. Following these fixtures, Seadrill has 92% of its jack-up capacity contracted for 2014 and 64% for 2015. The total order backlog for the jack-up fleet is $4.4B and average remaining contract duration is 2.6 years.
Seadrill expects market conditions likely to remain challenging through 2016 The company commented, "We believe that market conditions are likely to remain challenging through 2016 and the coming quarters will provide insight into the 2017 environment. It is important to recognize that we are in a cyclical business. The longer this downturn lasts, the more robust the recovery will be when it happens. Seadrill is in a position to capitalize on the upturn with the the most modern fleet and world class operations."
Seadrill volatility elevated into Q3 and outlook Seadrill November weekly call option implied volatility is at 89, December is at 76; compared to its 52-week range of 49 to 111, suggesting large near term price movement into the expected release of Q3 results on November 24.