Aban Offshore wins Rs 955 crore contract for jack-up rig in Mexico

CHENNAI: Offshore oil drilling rig contractor Aban Offshore Ltd said it has won a contract for deploying jack-up rig Deep Driller 1, owned by its step down unit Offshore Mexico, for 1,115 days, which is expected to generate revenue of $177 million (about Rs 955 crore).

The contract is likely to commence during July 2013, the company said in an announcement to stock exchanges.

This is the second such contract for the Chennai-based debt-ridden company in a week. It had earlier this week signed a contract for deployment of the jack-up rig Deep Driller 7 for a firm period of 1,005 days and expects revenue of about $152 million (about Rs 828 crore).

“These back-to-back contracts within a week will provide much needed financial relief to the company. Aban had a huge debt of Rs 12,180 crore as on first half of fiscal 2013. Hence, it is of paramount importance that Aban improves its fleet utilisation. Otherwise, servicing its interest and debt repayment obligations will be a challenge in the medium to long term,” brokerage ICICI Securities said in a research note.

ICICI Securities also raised its earnings forecast for the company by about 17% to Rs 85.1 a share for fiscal 2014 and by 32% to Rs 99.2 a share for fiscal 2015, post today’s contract. It has a "buy" rating on the stock with a target of Rs 409.