Any new financing in Northern Offshore will have to be supported by the cash flows from our two operative rigs, the Energy Searcher and the Northern Producer. The Company has, as of this date, no signed employment for Energy Searcher after expiration of the current INPEX job in August 2002. Management is actively pursuing several short-term employment opportunities. Northern Producer is currently under contract to Texaco at the Galley field until June 2003. Texaco has options to extend this contract.
The Board has received several proposals for a refinancing of parts of the Company's debt. All of these proposals have assumed that further credit support is required by the Company's largest shareholder, Osprey Maritime. The Greenwich Group, which controls Osprey and which also provided the Avalon financing, has been constructive in Northern Offshore's iscussions with them. They have, however, expressed the need for finding a long-term solution in exchange for any additional loan commitments or further guarantees.
The Board has been unable, to date, to conclude a financing solution that covers the Company's short-term liabilities which fall due in the coming months. It is therefore unlikely that the Company will be able to meet the interest payment on the US Bonds when this amount is due May 15th. The Board is however, cautiously optimistic that it will be possible to find a solution and based on that will continue to pursue discussions with commercial lenders and alternative financing sources. The Company's goal is to:
The US Bond Indenture gives the company a thirty day period in order to rectify a non-payment of interest. A significant portion of the Company's existing loans may also become due in this thirty day period, if the Company is unable to meet its bond interest obligation. This effectively means that a solution will have to be found before June 15th, 2002 in order to secure continued operation in Northern Offshore Ltd.
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