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Wood Mackenzie: New-look Maersk Drilling makes stock market debut

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Oilfield Technology,

Maersk Drilling, now named The Drilling Company of 1972 (TDC 1972), has been listed on the Copenhagen Stock Market.

Leslie Cook, Principal Analyst, Upstream Supply Chain, at global natural resources consultancy Wood Mackenzie, said: “In late 2017 we made the call that Maersk Drilling would be an acquisition target upon execution of their spin-off from AP Moller-Maersk.

“While only a few of the large drilling companies - Transocean, Ensco, and Seadrill - have elected to make acquisitions in the past two years, we believe that TDC 1972 will be part of the consolidation narrative in the near term.”

Ms Cook added that the offshore rig market continues to face challenges with over-supply and tempered demand. Despite some recovery in the offshore rig market last year, Wood Mackenzie firmly believes more consolidation is needed before any meaningful movement in utilisation occurs.

She added: “The newly independent TDC 1972 is the strongest competitor among their mid-sized peers. Their floating rig utilisation is 75% (with six of their eight rigs working), while industry average for all floaters remains below 70%.

“The company recently announced a US$300 million long-term contract with Inpex for the Maersk Deliverer semi-submersible. Average contract lengths for floating rigs in 2018 were approximately 200 days. The recent Maersk Deliverer contract is for 1095 days.

“The company also holds a leading position in the ever-growing harsh environment jack-up market. Over 50% of their jack-ups are rated for harsh environment and they have more harsh environment jack-ups in their fleet than any other company,” Ms Cook said.

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