Renamed Maersk Drilling 'strong competitor' in mid-rig market, Woodmac say

The rebranded Maersk Drilling is the “strongest competitor” in the mid-size rig market, according to energy research group Wood MacKenzie (WoodMac).

Called The Drilling Company of 1972 (TDC 1972), the new firm was listed on the Nasdaq Copenhagen subject at the AP Moller-Maersk annual general meeting on April 2.

The first day of trading for the firm was today (April 4).

Moller-Maersk got the demerger of its drilling business underway in February in a bid to shift away from the energy sector and instead focus on transport and logistics.

It follows Moller-Maersk’s sale of Maersk Oil to Total last year.

Leslie Cook, principal analyst of upstream supply chain WoodMac, said: “In late 2017 we made the call that Maersk Drilling would be an acquisition target upon execution of their spin-off from Moller-Maersk.

“While only a few of the large drilling companies  – Transocean, Ensco, and Seadrill – have elected to make acquisitions in the past two years, we believe that TDC 1972 will be part of the consolidation narrative in the near term.”

Ms Cook said the offshore rig market continues to face challenges with over-supply and tempered demand.

But even with some recovery in the offshore rig market last year, Ms Cook claims more consolidation is needed before any meaningful movement in utilisation occurs.

She added: “The newly independent TDC 1972 is the strongest competitor among their mid-sized peers. Their floating rig utilisation is 75% (with six of their eight rigs working), while industry average for all floaters remains below 70%.

“The company recently announced a US$300 million long-term contract with Inpex for the Maersk Deliverer semi-submersible. Average contract lengths for floating rigs in 2018 were approximately 200 days. The recent Maersk Deliverer contract is for 1,095 days.

“The company also holds a leading position in the ever-growing harsh environment jack-up market. Over 50% of their jack-ups are rated for harsh environment and they have more harsh environment jack-ups in their fleet than any other company.”

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