DryShips New Oil Pacts Add to Revenue Projections (DRYS, PBR)

DryShips Inc. (NASDAQ: DRYS) is seeing a rise this morning on two separate announcements regarding contracts for its offshore drilling contract initiatives.  The drybulk and off-shore contract drilling services outfit announced that its Ocean Rig UDW Inc. subsidiary has entered into firm contracts with Cairn Energy PLC for the “Leiv Eiriksson” and the “Ocean Rig Corcovado” for a period of approximately 6 months each.  A second announcement showed that its 3rd drillship new-building Ocean Rig Poseidon is involved as the Leiv Eiriksson will be released early from the existing contract and will be made available in Q2 2011.

The total contract value including mobilization for the “Leiv Eiriksson” is approximately $95 million and the mobilization period will start in direct continuation from the agreed release date from Petrobras (NYSE: PBR).

The total contract value including mobilization and winterization of the “Ocean Rig Corcovado” is approximately $142 million.

The firm contract period for the Ocean Rig Poseidon is for about 600 days plus a mobilization period, with a total contract value of $353 million with Petrobras Tanzania.

As far as how these contracts translate overall, the Thomson Reuters estimates for revenues are $853.86 million for fiscal 2010 and $1.17 billion for fiscal 2011.

DryShips is up almost 4% at $5.39 in active pre-market trading.

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JON C. OGG