The past few years haven’t been the best since its operation for Seadrill, Ltd. (NYSE:SDRL), which has been experiencing continues fall of its stocks. Such is the state of the current yield that its stock price has come down by a significant 50% from its previous figures in January.

In the recent years, the offshore drill business has been hit quite harshly by recession and issues of slow growth. The demand has plummeted several levels and is expected to remain so throughout the next year. On home ground, the US oil production seems to have exploded. However, on global front, issues such as poor European recovery, Japan’s recent fall in to recession in the wake of massive natural disasters that the Asian state had to face and an overall slow growth trends in Asia. Hence, a severe decline in oil prices globally, since June 2014.

In the wake of current scenario, local companies seem to be in a deadlock with OPEC on production grounds, since the current economic state doesn’t leave oil companies with enough yield. Seadrill (NYSE:SDRL) readies itself to release its Q3 figures on Nov. 26. Here is what analysts will scrutinize more closely:

Seadrill (NYSE:SDRL) has been quite tough on a working control on its rigs. This has enabled the company to keep track of use history in the form of a backlog, which when studied posts utilization rates that exceed 90%. The backlog summed up to $20 million in the last quarter, which is quite an impressive figure. However, several of the deals have a certain deadline and come with terms of cancellation. Hence, until the product is delivered, there is no guarantee that these deals will hold. If they fail to hold, the backlog will eventually fall and this will point towards industrial weakening that will in turn affect Seadrill (NYSE:SDRL).

There are two types of investors that have been attracted to Seadrill (NYSE:SDRL), those looking for better yield and those that are interested in a potential growth or expansion program. Currently, the $4 per annum payout, which is 20% return on that day’s share price may seem workable, but it may vary in the future.

In order to keep a monotony to this amount, the company has been paying significant amount of capital, and this may not be the wisest of moves considering the current market scenario. It is not likely that demand is going to increase over night or that the oil prices will get better.

Seadrill (NYSE:SDRL) has put in to action quite an aggressive program that has ceased registering any new orders with the company, until things get better. However, the orders being operated are at several stages of completion. The company has 18 ships in some phase of construction, and it will cost $5.5 billion.

Seadrill (NYSE:SDRL) has strategized n a way so that it can avoid the current scenario, which is expected to extend in to the next year. The company can do so by keeping a strong position, money wise.

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