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$115,000 per day. The purchase option price after five years is around US$
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
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.
This announcement is distributed by Thomson Reuters on behalf of Thomson
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
information contained therein.
Source: Seadrill Limited via Thomson Reuters ONE
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