Awilco Drilling released a short press release today announcing that they have signed a letter of intent with Apache and Taqa to rent out the WilPhoenix rig for a 3 year period with options for another 2 years. The contract value is estimated to be approximately 424 million USD which implies a day rate of 387,000 dollar (current rate is $315,000/day). This is good news because the company has now locked-in high day rates for both their rigs for the foreseeable future. The WilHunter is on contract until 15 November 2015 and the WilPhoenix will now be on contract until the second half of 2017. With so much certainty about earnings I don’t think this stock deserves to trade at a 25% dividend yield.
Long Awilco Drilling