Coastal Contracts sells jack-up rig to avoid market downturn
- Business & Finance
Coastal Contracts’ subsidiary, Thaumas Marine Pte Ltd, has secured a contract for the sale of one jack-up drilling rig (JUDR) for approximately RM807 million ($224.1 million).
According to Coastal Contracts’ Bursa Malaysia filing, the rig was sold to a “reputable oil company”.
The rig is expected to be delivered in the third quarter of 2015.
Ng Chin Heng, the Executive Chairman of Coastal, commented: “I am pleased to announce that Coastal Group has secured asale order of its first JUDR. With the latest sale, our cumulative sales order book has further increased to a high of RM1.92billion, balanced with our long term charter contract for Jack-up Gas Compression Service Unit in Mexico.
“Amid low oil prices, the offshore drilling industry is facing rough times as most of the oil majors have reduced their drilling budgets and are looking to cut costs, leading to less exploratory endeavours and to a drop in demand for offshore drilling rigs. The decision to sell our first JUDR was in order to reduce the Company’s exposure to a potential downturn in the drilling market.”
Ng further added: “The Management believes that the sale of JUDR is a positive move at current market environment, which showed the Management’s prudence in avoiding unmanageable risks to the Group. On our second unit of JUDR, we are in the midst of negotiating a drilling contract with potential charterers. The construction for the second JUDR is progressing smoothly and we expect the construction to be completed by Quarter 4 2015.”