KEPPEL FELS said today it has clinched an $820M contract to build four jack-up rigs for Mexico¡¯s Grupo R.

To be built to Keppel¡¯s proprietary KFELBS B-class design, the rigs would be delivered from the second quarter through the fourth quarter of 2015.

The units, customised to Grupo R's requirements, could drill down to 9.14km (30,000ft) of water and operate down to 400ft.

Keppel FELS¡¯s managing director Wong Kok Seng highlighted Mexico¡¯s importance as an offshore market for the yard.

¡°We look forward to support Grupo R as they expand their fleet of premium jack-up rigs for the Mexican market, with safe, on time and on budget deliveries,¡± he said.

The new contracts are not expected to impact Keppel¡¯s finances this year, the group said.

With its recent wins, Keppel will have built 10 KFELBS B-Class jack-up rigs for Mexican clients, including the two units clinched from national oil company PEMEX in December last year.

Sector analysts Jason Saw and Lee Yue Jer of DMG & Partners Research estimated that the new orders to have lifted Keppel¡¯s orderbook value to S$1.59Bn ($1.2Bn), which is 32% of its full-year forecast of S$5Bn.

¡°We estimate that Keppel has a backlog orderbook of S$14.4Bn, equivalent to nearly two times annual O&M revenue,¡± noted Saw and Lee. ¡°In our view jack-up rigs will be the key order driver this year as the fleet renewal cycle is still intact, and few orders were placed last year.¡±

DMG maintained its ¡®neutral¡¯ rating for Keppel, with the target price also unchanged at S$11.21 per share.

¡°We reiterate our view that Singapore yards may find it hard to raise prices to expand margins due to the rush of the Chinese yards into the jack-up market with near-guaranteed take-out financing,¡± concluded Saw and Lee.