Offshore Drilling News, Commodity Pricing and Capital Markets
Brent crude oil is up about 9% from one month ago and is hovering around $68 per barrel, setting the backdrop for what should be a healthier market for exploration and production companies as well as offshore drillers. Within offshore drilling, signs of highly anticipated industry consolidation are starting to emerge. For example, Noble reportedly made a bid for certain Seadrill assets. Seadrill Partners secured a four-well contract plus an option for up to seven additional wells for the West Capella drillship in Malaysia. Vantage Drilling will provide services for the West Capella, pursuant to a management services agreement between Vantage and Seadrill Partners.
Commodity prices in general have been on a tear, with iron ore prices spiking. The price movement creates an interesting dynamic for iron ore producer Samarco, which resumed operations in December 2020 and is proceeding with what will probably be a very contentious recuperação judicial bankruptcy proceeding.
Meanwhile, the capital markets are open for many companies that need funding. Brazilian airline Gol reopened its outstanding 8% senior secured 2026 bonds for an additional $300 million at 8%, in a deal that was upsized due to very strong demand. Blue Ribbon LLC, via lead arranger JPMorgan, priced its $368 million senior secured term loan B. However, after investor pushback, the company ultimately priced at L+600 bps, 75 bps LIBOR floor and 97.5 OID, at the wider end of revised guidance of L+575 to L+600 bps.