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Seadrill Limited : NADL - New sale and leaseback transactions with Ship Finance totalling US$600 million for the West Linus



   Seadrill Limited : NADL - New sale and leaseback transactions with Ship
             Finance totalling US$600 million for the West Linus

Hamilton, Bermuda, July 1, 2013 - North Atlantic Drilling ("NADL") and Ship
Finance International Limited ("Ship Finance") today announce an agreement to
a combined sale and leaseback arrangement whereby Ship Finance will acquire
the harsh environment jack-up drilling rig West Linus from a subsidiary of
NADL.  The West Linus is currently under construction at Jurong Shipyard in
Singapore with scheduled delivery in December 2013. 

The total acquisition cost will be US$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,  the first of which  will 
occur 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 2,  two-year 
extension options. 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.

US$195 million of the purchase price has  been received by NADL in June  2013, 
and the  remaining  US$405 million  will  be  received on  delivery  from  the 
shipyard in December 2013. The debt  financed portion of the total price  will 
be US$475 million in  total, of which  US$70 million will  be funded now,  and 
US$405 million at delivery from the shipyard.

The bareboat  charter rate  paid  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$115,000 per day. The purchase option  price after five years is around  US$ 
380 million.

Due to the features in the chartering agreement, we expect the rig to continue
to be  recognized as  an  asset on  NADL's balance  sheet  based on  US  GAAP. 
Consequently, NADL does not expect to record a gain from the sale of the  West 
Linus.

 

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 USD 2 billion.

 

This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.

 

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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: Seadrill Limited via Thomson Reuters ONE
HUG#1713224
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