Paragon Enters into $300M Sale-Leaseback Deal with SinoEnergy for 2 Jackups

Paragon Offshore plc (Paragon) disclosed that certain wholly owned subsidiaries of the company, which were part of the company's acquisition of Prospector Offshore Drilling S.A. (Prospector), have entered into a combined $300 million sale-leaseback financing facility with subsidiaries of SinoEnergy, a private investment firm registered in the British Virgin Islands. Net of fees and expenses, Prospector expects to receive net proceeds of approximately $292 million.

Under the terms of the agreement, Prospector will sell two heavy-duty, harsh-environment jackups, Prospector 1 (400' ILC) and Prospector 5 (400' ILC), to subsidiaries of SinoEnergy and immediately enter into a bareboat rental charter for the assets for a period of five years. The bareboat charter fee for Prospector 1, which is under firm contract until mid-September 2016, is $71,000 per day through November 2016, after which it will be $42,000 per day for the remainder of the charter. The bareboat charter fee for Prospector 5, which is under firm contract until mid-November 2017, is $71,000 per day through February 2018, after which it will also be reduced to $42,000 per day. The combined implied cost of borrowing is approximately 7.5 percent, including fees and expenses. The lease financing is non-recourse to Paragon.

"We are extremely pleased to have secured this financing on the two Prospector rigs at what we consider to be an attractive rate in this environment," said Randall D. Stilley, president and CEO of Paragon. "As a result of this financing initiative, we have increased financial flexibility and are evaluating options for the use of the proceeds, whether it be to retain the cash in order to increase our liquidity or to further strengthen the balance sheet through debt reduction."

The facilities are expected to fund by early third quarter 2015.  Funding is subject to customary conditions for a transaction of this nature.



Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Travel Wind O&M Tech
Expertise: Electrical Technician
Location: Illinois, IL
Protection and Control Specialist - Relays
Expertise: Electrical Technician|Electrician
Location: Cincinnati, OH
Slot Saw Operator - D-Shift
Expertise: Machinist|Mechanical Technician|Welding
Location: Lodi, CA
search for more jobs

Brent Crude Oil : $49.98/BBL 1.59%
Light Crude Oil : $49.18/BBL 1.56%
Natural Gas : $2.73/MMBtu 1.44%
Updated in last 24 hours