North Atlantic Drilling Ltd. (NYSE:NADL) Soars Over +200%

North Atlantic Drilling Ltd. (NYSE:NADL) Soars Over +200% On News Of 10-Year Contract With ConocoPhillips Skandinavia AS

10:49:00 AM

Shares of North Atlantic Drilling Ltd. (NYSE:NADL) are reaching as high as $2.41, up 228% mid-day today, Tuesday April 11th, 2017, following the announcement of a 10-year contract with CoconoPhillips Skandinavia AS.  The new contract awarded is estimated to exceed revenues of $1.4 billion. This figure is excluding performance bonuses.

The press release explains, as part of the agreement, the Company has agreed to a day rate adjustment on the existing West Linus contract effective from April 2017, resulting in a $58 million reduction in contract backlog, It's important to note, however, that the other leases are reported as seeing increases in possible revenues totaling the aforementioned $1.4 billion dollars.

The new West Elara contract which is expected to commence in October 2017. As reported in the press release, this includes a period of fixed day rates until March 2020 and contributes approximately $160 million of contract backlog, which refers to unfinished work or to customer orders that have been received but are either incomplete or in the process of completion.

A market indexed rate which represents an entire stock market and thus tracks the market's changes over time, is applicable thereafter until October 2027.  The Company believes this generates an estimated $530 million of contract backlog (revenues expected after orders are filled and shipped).

The contract on West Linus has been extended from May 2019 until the end of 2028 at a market indexed dayrate, which the Company believes will contribute another estimated $706 million of contract backlog.

These backlogs estimate indications via the overall market indexed rate period for each Oil rig and is based on the third party dayrate estimates presented in the Seadrill Limited release dated January 31, 2017, which is highly reputable and includes an agreed percentage discount. Of course, all estimates are subject to changes based on market conditions.

About North Atlantic Drilling Ltd. Ltd. (NYSE:NADL)

North Atlantic Drilling is a leading offshore harsh environment drilling company, aiming to be our customers' most important partner in making oil and gas available in a safe and cost-effective manner. The company has a fleet of eight harsh environment units in operation and one new build under construction. North Atlantic Drilling has some 600 skilled and highly competent employees.

North Atlantic Drilling is a 70.4 percent owned subsidiary of Seadrill Limited, and has its shares listed on the NYSE.