Seadrill Buys Under-Construction Rig in China

Prospector Offshore Drilling today informed that it has entered into an agreement to sell an under-construction jack-up rig to Seadrill.

According to a press release issued by Prospector Offshore this morning, Seadrill will pay $55.2 million in cash to Prospector for the JU2000E-design rig, being built in China.

The closing of the transaction will be subject to obtaining the approval of DSIC-Offshore, the China-based company constructing the rig.

Robert W. Rose, the Company President and CEO, commented today: “The agreement for the sale of shares in Prospector Rig 3 Owning Company S.à r.l. is an important step for the Company. Proceeds from the sale, will substantially strengthen the Company’s balance sheet as we prepare to take delivery of the remaining rigs.”

Seadrill will pay a total purchase price of US$235 million for the rig. In addition, Seadrill will provide drilling and handling tools, spares and operations preparations resulting in a total cost for this rig, ready to drill, of approximately US$250 million.

The Prospector 3 is scheduled to be delivered from Dalian Shipbuilding Industry Offshore Co., Ltd. (DSIC Offshore) in China during the first quarter of 2014. The new unit is based on the F&G JU2000E design, with water depth capacity of 400ft and drilling depth of 35,000ft.

The lack of premium jack-up newbuild activity over the last decade is beginning to be felt and demand is currently exceeding available supply. The tightness in the market is leading many customers to contract these units for significantly longer terms than previously experienced for this asset class.

“The Board of Seadrill continues to be of opinion that the premium jack-up market provides a compelling investment opportunity,” Seadrill said in a statement.

[mappress]
Offshore Energy Today Staff, November 15, 2013