Sevan Marine Stock Rises as Huntington Vessel Starts Work
Sevan Marine ASA (SEVAN), a developer of floating oil and gas vessels that’s struggled with higher costs, rose the most in three weeks in Oslo after the successful test of its Voyageur Spirit unit moved it closer to being debt free.
Shares in the Arendal, Norway-based company climbed as much as 2.8 percent, the most since March 27, and traded 2.3 percent higher at 18.1 kroner as of 11 a.m. That extends the stock’s gain to 25 percent during the last 12 months and gives Sevan a market value of 947 million kroner ($165 million).
Sevan’s Voyageur Spirit floating production, storage and offloading vessel has completed 72 hours of continuous production testing at the North Sea’s Huntington field, the company said in a statement on April 13. The so-called FPSO is now expected to be transferred to Voyageur LLC, a unit of Teekay Corp. (TK), within a week, Sevan said.
“Following this, Sevan will be debt-free with in excess of $50 million in net cash,” Erik Toenne, an analyst at Sparebank 1 Markets AS, said in an e-mailed note to clients. The transfer has “been perceived as a risk-item” by investors and as a result Sevan “should react positively,” wrote Toenne, who has a buy recommendation on the stock.
Sevan Marine agreed to sell the Voyageur, Piranema and Hummingbird vessels, long with a 40 percent stake in the company, to Teekay in October 2011 as part of its restructuring to avoid bankruptcy after struggling with larger-than-expected maintenance costs on its Voyageur unit.
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