Seadrill Earnings — Looking Good, Dividend Next Year?

Seadrill released earnings after the close in Oslo today, and beat most estimates. Revenue and earnings were up, thanks to the large number of new rigs that went operational over the last six months, and they continue to ramp up profitability.

They also said some encouraging things about financing — they have a big bank loan that they’re in the process of converting to long term debt, which would be nice, and they said they have every intention of re-starting the dividend. The dividend, however, depends on more flexible financing and perhaps on slightly higher revenues, so it may come next year, after two more new deepwater rigs hit the water. They are having no trouble getting good bids on newbuild deepwater rigs, which are still well over half a million dollars a day, but the jackup market stinks — they’ve got a few jackups idle right now, which is hurting results.

So, all in all, a bit better than expected, they didn’t report any more new delays in commissioning rigs (that plagued them a bit last year), and they see the market and the financing environment both improving, and they’re continuing to hold investments in several other drillers … we’ll see where this goes, but so far I’m happy to remain a shareholder, even with the recent 60%+ bounce from the lows (I did pare back my holdings somewhat a while ago, at much lower prices).

News piece on the earnings here, you can see the full release and hear the webcast of the conference call on SeadrillR