Torch Offshore Purchases Construction Vessel
Torch Offshore, Inc. has entered into an agreement for the purchase of the Smit Express, a 520-foot vessel, from Smit International for $9.75 million. The vessel will be converted to a DP-2 offshore construction vessel and renamed the Midnight Express.
Delivery of the Midnight Express to the US Gulf of Mexico is expected within the next three months, with the conversion to begin shortly thereafter. Concurrent with the purchase and conversion of the Midnight Express, Torch Offshore continues to negotiate contracts for the fabrication of our patented lay system as well as for the purchase of other necessary installation equipment. Full integration of the equipment, the lay system and the vessel, followed by sea trials, is scheduled for mid-2003.
Concurrent with the decision to purchase the Midnight Express, the construction of the Midnight Warrior is being deferred. Although the Midnight Warrior remains an economically viable option, deferring the Midnight Warrior, a new build DP-2 vessel, in favor of converting an existing vessel to DP-2 with greater pipe lay capabilities, is expected to result in significant capital cost savings and to save a year on the delivery timetable.
Torch Offshore Chairman and CEO, Lyle Stockstill, commented, "With the agreement in place to purchase the Midnight Express, Torch Offshore is one large step closer to meeting our long-term strategic goal of entering the deep and ultra-deep water flowline market. With its innovative reel pipe lay system, capable of economically installing 6 to 12 inch diameter pipelines in deep and ultra-deep water, the Midnight Express will prove a formidable competitor to the existing deep water fleet capable of participating in this market."