Shelf Drilling working to secure funds for rig upgrade

Offshore drilling contractor Shelf Drilling has closed a private placement of $80 million of senior secured notes with an intention to use the proceeds to finance activation and upgrade costs for a drilling rig recently acquired from Maersk Drilling. 

Shelf Drilling Enterprise, formerly known as Maersk Completer; Image source: Maersk Drilling

To remind, Shelf Drilling and Maersk Drilling in early January 2020 closed a transaction related to the sale of the Maersk Completer jack-up rig. The rig was then renamed Shelf Drilling Enterprise.

Later in January Shelf Drilling secured a contract for the Shelf Drilling Enterprise with Chevron for operations in the Gulf of Thailand.

Shelf Drilling announced on Thursday that Shelf Drilling Holdings, one of the company’s indirect, wholly-owned subsidiaries, had closed a private offering of $80 million aggregate principal amount of 8.750% senior secured notes due 2024.

The company said it intends to use the net proceeds from the notes offering to replenish its liquidity following the acquisition of the rig and to finance the remaining reactivation and upgrade costs associated with the deployment of the rig in advance of the contract scheduled to start in August 2020 in the Gulf of Thailand.

The notes have been issued at an issue price of 100% and will mature on November 15, 2024. The notes have been guaranteed by the company and certain of its indirect subsidiaries that guarantee Shelf Drilling Holdings’ existing indebtedness and are secured by a second lien on substantially all of the assets that secure Shelf Drilling Holdings’ revolving credit facility.

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