Sapura T-19

Sapura Energy to get rid of three rigs

Malaysia’s Sapura Energy Berhad has moved to dispose of three drilling rigs to NKD Maritime for an aggregate cash consideration of $8.2 million as part of its focus on long-term sustainability and improving its liquidity position.

Sapura T-19; Source: Sapura Energy

On 18 August 2022 Sapura’s subsidiary, Sapura Drilling, signed a Memorandum of Agreement (MOA) for the sale of self-erecting tender-assisted drilling rigs Sapura T-19, Sapura T-20, and Sapura Setia built in 2010, 2014, and 2005, respectively.

The rigs are either ageing (Setia) or not technically competitive (T-19, T-20), the company explained. Based on the market demand, the company does not see any financially viable prospects that could cater for the rigs to be reactivated in the foreseeable future. Therefore, the rigs have a high probability of being stacked in the coming years which exposes the company to more costs and risk of deterioration.

According to the company, based on an informal market survey, the fair market value could not be obtained for the rigs as there is no potential demand for them. Instead, a demolition valuation was conducted as there is a potential sale in the demolition market.

As a result, the rigs will be broken up, demolished, scrapped and recycled and will not be engaged or employed in extraction, navigation or trade and will not otherwise be used as rigs of any kind or nature.

The proposed disposal is part of the company’s focus on long-term sustainability and improving its liquidity position, streamlining its operating model and providing greater flexibility for strategic growth.

Earlier this year, Sapura also sold its pipelaying and crane vessel Sapura 3000 for a total cash consideration of $71.5 million.