Northern Offshore Inks Deal for Two Jackups

Northern Offshore, Ltd. has signed contracts for the construction of two LeTourneau Super 116E class jackups, with an option for the construction of two additional rigs of the same design.

The yard contract price is less $180 million, reported Northern Offshore, with favorable tail-end-heavy payment terms.

Northern expects for delivery of the rigs during the first and third quarters of 2016, respectively. These two jackups will add to the company's existing fleet consisting of four drilling units, a drillship, a semisubmersible and two jackups, which are stationed in the North Sea, Denmark, Southeast Asia and India.

"This is a turning point for our company, as we continue to execute our stated corporate strategy of transitioning into the ownership and operation of new, state-of-the-art jackup rigs," stated Gary W. Casswell, president and chief executive officer of Northern Offshore.

"We believe, after evaluating several investment alternatives, that investing in this class of jackup will give the best return on capital. We are confident there will continue to be strong demand for jackup rigs with the technical specifications and capabilities of these new assets, which are ideally suited for marketplaces in South East Asia, the Middle East, West Africa and Latin America. Further, this order represents the strong commitment of the board of directors to the future development of the company and strengthening of earnings growth for our shareholders."

In the company's second quarter analysis, posted Aug. 14, net income for the three months was $1.7 million, compared to net income of $2.3 million for the second quarter of 2012. Revenues for the second quarter of 2013 were $44.1 million, compared to $43.6 million for the second quarter of 2012.


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