Standard Drilling disposes of vessel to diversify energy investments

Cyprus-based offshore vessel operator S.D. Standard Drilling has agreed to sell one of its large-sized platform supply vessels (PSVs) for $10.3 million, which is in line with its strategy to pursue more liquid investments in its core sectors.

PSV Standard Princess; Courtesy of Fletcher Group

Standard Drilling reported on Tuesday that it had entered into a memorandum of agreement to sell its PSV vessel, Standard Princess, for $10.3 million through a wholly-owned subsidiary. The firm confirmed that proceeds from the vessel and any future divestments of the offshore fleet would be directed towards more liquid investments within its core sectors.

Standard Drilling vessel sale for diversified investments
PSV Standard Princess; Courtesy of Fletcher Group

Martin Nes, Chairman of Standard Drilling, commented on the sale: “As previously announced, Standard Drilling has transitioned its focus to more diversified investments within the energy, transportation and commodities. The sale of Standard Princess is in line with the new strategy and gives Standard Drilling increased flexibility to pursue other investment opportunities.”

Standard Drilling will get a gross of $2.3 million, compared to the book value end of the third quarter of 2021 as a direct result of this sale. The vessel with 1,060 square metre deck space was built in 2008 at Aker Brattvaag in Norway.

This vessel was under contract several times over the past few years. From September 2018 until February 2019 the vessel worked for Allseas. In March 2019, this PSV scored a long term contract with an undisclosed customer and then, in December 2020, the platform supplier started its nine-month firm contract with CNR.

Standard Drilling will control, directly and indirectly, a fleet of 7 PSVs after the sale of this vessel. The remaining fleet will consist of two large 1,000 square metres PSVs, which are 100 per cent owned by Standard Drilling and five medium-sized PSVs with approximately 28 per cent ownership interest.

The firm expects that this sale will further strengthen its cash balance and investment capacity. The company already received a 10 per cent deposit of the purchase price and the transaction is expected to be completed within January 2022.

The company also sold other PSVs to obtain more cash, which would allow it to pursue its aim to diversify its investment portfolio. To this end, the firm agreed to sell one of its vessels for $7.5 million in June and completed the sale in August 2021.

In related news, Standard Drilling, as a shareholder in rig owner Noble Corporation, said it would vote against the proposed merger between Noble and Maersk Drilling, believing it would not be a merger of equals despite “appealing optics.”

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