Norway's Seadrill (SDRL.OL) is to acquire two ultra-deepwater semi-submersible drilling rigs, expecting to reap benefits from an improving drilling market this year and sending its shares higher.

Seadrill, one of the world's largest deep-water drillers, said on Monday the total project price for the two rigs is estimated to be about US$1.2 billion ($1.54) and said it had secured new bank debt to finance the investment.

Shares in Seadrill rose 1.6% to 200.3 crowns by GMT 0910, outperforming a 0.8% rise in the Oslo stock exchange benchmark index <.OSEBX>. The stock has risen sharply in recent months and hit a record 208.70 crowns last month.

Seadrill Chairman John Fredriksen said in a statement the cash break-even cost per day for each rig was expected to be around US$385,000.

“The board anticipates that the purchase of the two rigs including the agreed financing will strengthen Seadrill's dividend capacity going forward,” Fredriksen said.

Seadrill currently has 52 drill rigs in its fleet, including 14 for use in ultra-deep water, according to its website.

The two new rigs, which are under construction at the Jurong Shipyard in Singapore, are expected to be delivered in the first quarter and fourth quarter of 2011, respectively.

The first rig to be completed has a five year contract in place, subject to further discussions among the involved parties, Seadrill said. The second unit has no employment in place.

Atle Hauge, analyst at brokerage Carnegie, said Seadrill's purchase of the two rigs showed it was more willing to take on risk than other rig companies. "Seadrill is in the category which is seen as high quality, with good experience in deepwater," he said. "Considering these are probably pretty high-end rigs, I believe this risk is acceptable."

Seadrill Chief Executive Alf C Thorkildsen told Reuters Seadrill expects the market to be strong enough to exceed the break-even level for the rigs.

“We show that a break-even level of costs, including interest expenses, is at US$385,000 and we think that the market is better than that,” Thorkildsen said. 

“We believe that the market will be better in 2011. I think it will rise from 2010 in 2011,” he said, adding that the market for all three of Seadrill's segments looked set to improve.

Oil services firms have been cautious in predicting market conditions in 2011. Haugen said 2011 has been seen as a big test for deepwater drilling as new rigs come into service.

“I believe rates will stay flat in today's market -- I don't believe they will go down,” Haugen said. “That is because we see activity increasing and see a solid rise both in 2011 and 2012.”