Sembcorp Marine reported Wednesday that its subsidiary PPL Shipyard has signed a turnkey jackup contract worth $214.3 million with Marco Polo Drilling (I) Pte. Ltd., an indirect wholly-owned subsidiary of Marco Polo Marine Ltd (MPM), as well as the grant of an option for two sequential units of similar jackups to be exercised at MPM's discretion. The transaction contemplated under the contract is subject to approvals from the shareholders of MPM.
Scheduled for delivery in fourth quarter 2015, this high specification and high performance deep drilling offshore jackup will be built based on the yard's proprietary PPL Pacific Class 400 design. This new rig will be capable of operating in deeper waters of 400 feet and drilling high pressure and high temperature wells to depths of 30,000 feet. Incorporating advanced drilling equipment for improved drilling efficiency with 1.5 million pound of static hook load capacity, offline handling features and simultaneous operations support, the Pacific Class 400 rig will be capable of jacking at full preload. It will also be equipped with full catering facilities and amenities with accommodation for 150 people on board in one-man and two-man cabins.
Sean Lee Yun Feng, Group CEO of Marco Polo Marine said "The signing of the agreement with PPL Shipyard is an epochal moment as it marks the start of a significant leap forward in terms of our operations and service offerings. Together with the grant of the two option units, we are delighted to work together with PPL Shipyard as it is one of the most highly regarded shipyards globally. We are confident of the on-time and quality delivery of high specification rigs from PPL Shipyard backed by its strong track record."
Wong Teck Cheong, managing director of PPL Shipyard said "We are honored that Marco Polo Marine has chosen and entrusted PPL Shipyard with the construction of its maiden offshore drilling rig. The jackup order signifies the owner's confidence in the jackup market and their trust in our proven rig design and ability to deliver quality rigs on schedule and within budget. We have secured a total of 44 orders for the Pacific Class design jackups since 2004, with 35 units delivered and in operation. Our proprietary ownership of the Pacific Class design offers us the flexibility to provide custom-design turnkey solutions to meet the unique requirements of our clients and the field operators. Since the advent of the Pacific Class design, we have built rigs for several clients venturing into the offshore drilling business and today they are well established offshore drilling rig owners and contractors. We are impressed with Marco Polo Marine's strong management and foresight and we are confident that they will reap success in this new aspect of rig ownership and chartering business."
Barring unforeseen circumstances, Sembcorp Marine expects a positive contribution to the earnings from the contract. However, the contract is not expected to have any material impact on the consolidated net tangible assets per share of Sembcorp Marine for the year ending Dec. 31.
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