Venture Drilling AS, a joint venture company between Sinvest and Petrolia, has entered into a bare boat charter agreement with FSUE Arktikmorneftegazrazvedka for hire of the vessel Valentin Sashin for a period of 5 years (main period) after an initial reactivation period. Venture Drilling has the option for 6 additional two year periods to extend the charter (option period), for a total charter period of 17 years, including the initial contract. The mobilization/reactivation hire is US $4,000 per day until paid work for the unit. The bareboat hire in Main Period and Option Period is US $21,000 pr day.
Pre-closing the set of agreements, Petrolia has obtained the full title and ownership to all drilling equipment and other removable equipment for the operation of the vessel Valentin Shashin, which previously was owned by several parties, such as Petrolia and other third parties. Sinvest and Petrolia have agreed that Petrolia shall transfer the title and ownership to such equipment to Venture Drilling AS.
As a part of this transaction Arktik has accepted to settle all potential claims against Petrolia and other Petrolia Drilling related companies.
Sinvest has acquired Skeie Group AS's shares in Venture Drilling AS for NOK 16,000,000 and contributed with a further share subscription in the amount of US $12,500,000.
Venture Drilling AS has a share capital of NOK 50,000,000 and an estimated equity capital of US $42,514,859. The total of budget, including reactivation and reclassification, of the vessel is estimated to approximately US $40 million, all inclusive. The drillship is already being marketed for operations worldwide and the reactivation has started.
Venture Drilling AS has entered into an arrangement with Pareto Securities ASA for a private placement of a Bond Loan of US $40 million with maturity December 2010.
Sinvest and Petrolia shall each control and vote for 50% of the shares in Venture Drilling AS.
The effect of this transaction will be incorporated in the accounts for both Sinvest and Petrolia for the 4th quarter 2005.
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