Rebuilding an offshore driller

A few months ago, I initiated a thread on offshore driller Seadrill re-listing on NYSE after coming out of its second bankruptcy.
Last week (12/23) Seadrill (SDRL) announced a merger deal with smaller drilling entity Aquadrill LLC. For those not familiar with Aquadrill LLC, it is the post-bankruptcy entity (that was formerly Seadrill Partners)

In a sense, SDRL are paying somewhere between 1.5X-to-2X for the surviving Aquadrill LLC assets. What I mean by that is, initially all the Aquadrill assets belonged to original SDRL. When the assets dropped down to Seadrill Partners, typically SDRL had an ownership or equity stake either directly or indirectly in the asset. When the Seadrill Partners equity got wiped out, SDRL would have taken a hot too. Now, with both entities reorganized via bankruptcy, it is a second go-around on the same assets.

Is this a good deal for SDRL? I would say, it depends on two aspects

  1. The employment prospects for the assets. In that vein, half the Aquadrill assets are UDW drillships, and all four are currently employed on contracts.
  2. The future outlook of the offshore drilling segment. That covers the rest of the Aquadrill LLC assets - a Harsh Environment (HE) UDW drilling rig, and three tender rigs. Currently, only one of those four assets is contracted.
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