Awilco Drilling (AWDR) - Letter of intent offers further support to the huge 20%+ dividend payout
The UK based/Oslo listed offshore driller has signed a Letter of Intent (LOI) with Apache North Sea Limited and TAQA Bratani Limited for the provision of WilPhoenix for a 3 year firm term commitment plus up to a further 2 years of options. It's highly supportive for the dividend.
The contract value for the firm term is estimated to be approximately US$424m (equivalent to a day rate of US$387.5k) and is expected to commence in the second half of 2014 depending on Premier Oil’s exercise of options on the rig. Broker Fearnley modeled day rates of US$435k through 2016 and US$250k beyond. On the basis of a mid 2014 start-up they assume an average day rate modeled of US$404k with the the new contract negative US$5m (a trifle!) to their 2014 EBITDA estimate and US$12m to their 2015 EBITDA estimate. However, it looks fairly good for the dividend and…