SembCorp Marine Divests its Entire Interest in Deep Driller I Jack-up Rig for a Net Profit of S$13.3 Million
SembCorp Marine wishes to announce that it has divested its entire 82 per cent equity stake in Kristiansand Drilling Pte Ltd (Kristiansand) to Deep Drilling I Pte Ltd for a total cash consideration of US$97.0 million, following the minority shareholder of Kristiansand exercising the call option granted to them in January 2004.
Net profit from the above transaction is approximately S$13.3 million. For illustrative purposes only, based on the audited financial statements of SembCorp Marine for the year ended December 31, 2005 and assuming that the transaction was effected on January 1, 2005, the performa consolidated earnings per share would have been 9.38 cents instead of 8.45 cents per share.
Kristiansand is a single purpose joint venture company formed between Sembawang Shipyard (S) Pte Ltd, a wholly-owned subsidiary of SembCorp Marine and Deep Drilling I Pte Ltd, a wholly-owned subsidiary of Sinvest ASA in 2004 to construct and own a jack-up rig, Deep Driller I to be built by PPL Shipyard for a total contract price of US$110 million. SembCorp Marine holds 82 per cent equity stake in Kristiansand with the Skeie Group holding the remaining 18 per cent. The Skeie Group owns 35.5 per cent of Sinvest ASA, a public company listed on the Oslo Stock Exchange.
Concurrently, Deep Driller I, built by PPL Shipyard was delivered to Sinvest ASA. Deep Driller I is the first of a series of fifteen jack-up rigs currently under construction in SembCorp Marine’s shipyards of PPL Shipyard, Jurong Shipyard and Sembawang Shipyard. Built based on a design researched and developed by PPL Shipyard and its subsidiary Baker Marine, a company based in Houston, Texas, the high specification BMC 375 Pacific Class jack-up rig has the ability to operate in water depths of up to 375 feet and features increased deck capacity. Equipped with the time-tested Baker Marine Jacking System, Deep Driller I will be able to withstand storms and offer movement flexibility without the use of a rack chock system. It has the capacity to drill high pressure and high temperature wells of over 30,000 feet and has accommodation for 120 men.
Deep Driller I jack-up rig will be operated by Premium Drilling and chartered to Hardy Exploration & Production (India) for a drilling contract in block CY-OS/2 offshore the East Coast of India followed by a term contract with Reliance Industries in the same area of operations.
Following the divestment, Kristiansand ceased to be a subsidiary of SembCorp Marine. The above transaction is not expected to have a significant impact on the net tangible assets per share of SembCorp Marine for the financial year ending December 31, 2006.
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