A rush of rig contracts in the ultra-deepwater (UDW) sector has confirmed limited availability and rates above $500,000 per day, according to analysts at US investment bank Jefferies & Co.
The analysts say the UDW rig sector is at 100% utilisation, with the deepwater segment at 89% utilisation for the third month running.
“In a reversal of the last couple of months, the UDW segment has been the most active with a flurry of notable term contract signings confirming day rates above $500,000. Although we have been anticipating a surge in contract activity for some time now, we were surprised at not only the day rates of recent contracts but also the terms of several deals,” wrote the Jefferies analysts.
As examples, the analysts point to two Seadrill newbuildings, the West Leo, which landed a one-year contract for $510,000 per day, and the West Capricorn, which won a five-year contract at $490,000 per day. They also point to the Atwood Condor, with its 21-month contract in the US Gulf of Mexico (GoM) at $514,000 per day.
In addition, they underscore that the Maersk Discoverer has taken on a four-year deal with BP in the Mediterranean at $500,000 per day, while the Ensco 8505 won a two-year job for a consortium in the GoM.