Wednesday, December 22, 2010

Keppel Corp may extend gains on $236m rig job

Keppel Corp. (BN4.SG) may extend its gains following the company's midday announcement of a US$180 million ($236 million) contract to build a jack-up rig for Jasper Investments (FQ7.SG).

The deal comes with an option for an additional rig, which would double the entire contract value to US$365 million.

The initial rig is slated for delivery in 2H12 and brings the total value of new orders secured by Keppel this year to $3 billion.

The news follows rival SembMarine's (S51.SG) pre-market announcement today of a US$400 million contract to build 2 rigs for Noble Corp. (NE), and affirms the recent sector-wide pick-up in orders for high-specification rigs as oil companies replace their older fleet and upgrade some to meet higher safety standards.

Keppel shares are +0.6% at $10.78 midday. The $11.00 resistance level, which hasn't been breached this month, is likely to hold.


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