SFL - Acquisition of drilling rig
(Thomson Reuters ONE) -
Press release from Ship Finance International Limited, July 1, 2013
Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the "Company")
today announced that the Company has agreed to acquire the harsh-environment
jack-up drilling rig West Linus from a subsidiary of North Atlantic Drilling
Limited ("NADL"). West Linus is currently under construction at Jurong Shipyard
in Singapore with scheduled delivery in December 2013.
The total acquisition cost will be $600 million and the drilling rig will be
chartered back to NADL on a bareboat contract for a period in excess of 15
years. NADL has been granted four purchase options, first time after five years
and the last at the end of the charter period. Ship Finance will also have an
option to sell the rig back to NADL at the end of the charter period. NADL has
sub-chartered the rig to ConocoPhillips Skandinavia AS ("ConocoPhillips") for a
period of five years with two extension options of two years each. Expected
delivery to ConocoPhillips is April 2014 and the rig will be at a mobilization
rate from the delivery from the shipyard until commencement of the sub-charter.
$195 million of the purchase price was paid in June 2013, and the remaining $405
million will be paid on delivery from the shipyard in December 2013. The
financing package will be $475 million in total, of which $70 million has been
funded now, and $405 million will be funded at delivery from the shipyard. The
$125 million equity investment has been funded from the Company's recent equity
offering.
The bareboat charter rate over the first five years (excluding the four-month
mobilization period) will be approximately US$220,000 per day and the average
rate for the remaining 10-year lease period will be approximately US$115,000 per
day. The transaction will add more than $800 million to our the charter backlog,
and the average yearly net cash flow, after interest and loan amortization, is
estimated to be approximately $19 million, or $0.20 per share, during the first
five years.
NADL is an offshore harsh environment drilling company with focus on the North
Atlantic basin. The company has nine drilling units in the fleet, including five
semi-submersible, a drillship, and three jack-up rigs. Seadrill Limited
currently owns 74% of the outstanding shares and the company is listed on the
Oslo OTC exchange with a market capitalization of approximately $2 billion.
The bareboat charter includes an interest compensation clause whereby NADL will
compensate us for volatility in the interest rate environment, and due to the
frontloaded nature of the contract, we will be able to repay the loan amounts
quickly. We expect the rig-owning subsidiary to be accounted for as 'Investment
in associate' under US GAAP, similar to our three deepwater drilling rigs on
charter to Seadrill.
Ole B. Hjertaker, CEO of Ship Finance Management AS, said in a comment: "Ship
Finance has in the recent months invested nearly $1 billion in new assets which
is a firm commitment to our continued growth strategy. We are very pleased to
increase our exposure to the strong offshore industry with a state-of-the-art
harsh environment jack-up drilling rig which will be employed on a long-term
drilling contract to ConocoPhillips. Our charter backlog and long-term
distribution capacity is building in an accretive manner, and there is still
good capacity for more investments."
July 1, 2013
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
Investor and Analyst Contacts:
Harald Gurvin, Chief Financial Officer, Ship Finance Management AS
+47 23114009
Magnus T. Valeberg, Senior Vice President, Ship Finance Management AS
+47 23114012
Media Contact:
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock
Exchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 70
vessels, including 24 crude oil tankers (VLCC and Suezmax), two chemical
tankers, 12 drybulk carriers, 19 container vessels (including eight
newbuildings), two car carriers, six offshore supply vessels, two jack-up
drilling rigs (including one newbuilding), two ultra-deepwater semi-submersible
drilling rigs and one ultra-deepwater drillship. The fleet is one of the largest
in the world and most of the vessels are employed on long-term charters. More
information can be found on the Company's website: www.shipfinance.org
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including Ship Finance management's examination of historical
operating trends. Although Ship Finance believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond its control, Ship Finance cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to
differ materially from those discussed in this presentation include the strength
of world economies and currencies, general market conditions including
fluctuations in charter hire rates and vessel values, changes in demand in the
tanker market as a result of changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, changes in the Company's operating
expenses including bunker prices, dry-docking and insurance costs, changes in
governmental rules and regulations or actions taken by regulatory authorities,
potential liability from pending or future litigation, general domestic and
international political conditions, potential disruption of shipping routes due
to accidents or political events, and other important factors described from
time to time in the reports filed by the Company with the United States
Securities and Exchange Commission.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ship Finance International Limited via Thomson Reuters ONE
[HUG#1713209]
Unternehmensinformation / Kurzprofil:
Datum: 01.07.2013 - 13:54 Uhr
Sprache: Deutsch
News-ID 274757
Anzahl Zeichen: 7506
contact information:
Town:
Hamilton
Kategorie:
Business News
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"SFL - Acquisition of drilling rig"
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