China: Jiangsu Yangzijiang to Construct a Drilling Rig

The directors of Creon, the resources infrastructure investment company, announce that Jiangsu Yangzijiang Offshore Engineering Co. Ltd. (YZJOE) has entered into a contract valued at US$170 million with Explorer I Limited to construct and deliver one unit of a Le Tourneau Super 116E Class design self-elevating Mobile Offshore Jack up Drilling Rig.

Creon’s 46.45% owned joint venture with China’s third largest ship building group, Yangzijiang Shipbuilding (Holdings) Pte Ltd, has a 40% holding in YZJOE. Explorer 1 Limited is 100% owned by Mena Offshore Investments Limited (“MENA”) and managed by Offshore Logistics (Asia Pacific) Pte Ltd (“OLAP”).

Delivery of the Rig is anticipated in the second quarter of 2015. It will be built to ABS Classifications and capable of drilling to 30,000 feet in sea depths of up to 350 feet. The rig will be fully equipped with state of the art drilling equipment and will have accommodation for 120 people.

Construction of the offshore mobile drilling rig will take place at the existing yard of Creon’s joint venture partner, Yangzijiang Shipbuilding, in Jiangsu Province, China.

None of the directors or substantial shareholders of the Company have an interest, direct or indirect, in the contract.

Glen Lau, CEO of Creon, said:

“This agreement bears testimony to the strength of our joint venture partner – Yangzijiang Shipbuilding – our ability to source significant contracts, and the demand in the market for modern mobile drilling vessels to replace older and shallow water drilling rigs that are being phased out of the industry.

“Creon will be able to leverage off our partner’s existing world class state of the art yard and infrastructure whilst simultaneously allowing our joint venture business, YZJ Offshore, to develop a new facility at the recently acquired shore line land in Taicang outside Shanghai.

“We are confident that we will be able to build a significant order book through YZJ Offshore and Jiangsu Yangzijiang Offshore Engineering Co. Ltd.”

Mena Offshore Investments Limited’s CEO, Mr Dino Pereira, commented:

“We were impressed by the professionalism of the management of Yangzijiang Group, its state-of-the-art yard and facilities. We believe that Yangzijiang is one of the finest shipbuilders in the world and should be able to migrate and leverage its experience and expertise to the jack up rig construction business through YZJ Offshore. We are likewise impressed by the highly qualified and experienced management personnel that have been assembled to run the offshore division. We look forward to forging a close working relationship with the team.”

[mappress]

Press Release, December 04, 2012