Ferncliff has entered into a memorandum of understanding to acquire the three barges from Pride International, an American based drilling contractor, for $213 million. Ferncliff is expected to complete the acquisition of the barges by Q4 2007, with the management contracts commencing in parallel. The management contract includes coverage of KCAD's costs, a fixed management fee, EBITDA related fee and performance related bonuses.
Abbot Group has also signed an option agreement to take a 9.99% share of Ferncliff's interest in the three tender barges, at a cost estimated to be in the region of $10 million, enabling it to further expand its offshore rig portfolio, without necessitating the total acquisition of a full portfolio of assets.
With the addition of Alligator, Al Baraka and Barracuda to Abbot's tender barge rig portfolio, it will operate seven barges, all operating in West Africa and the Far East, further underlining its strategic intention to concentrate operations across its main business divisions in key growth regions.
Two of the barges, Barracuda and Alligator were built in 1982 and operate in depths of up to 450ft. The third, Al Baraka, was built in 1993 and operates in depths of up to 650 ft. All three units are currently operating in Western Africa under contract to major international oil companies. Alligator is due to remain in Angola on contract with Chevron and Pride is currently in advanced negotiations to contract both Al Baraka and Barracuda on long term contracts in the Far East.
Alasdair Locke, chairman of Abbot said: 'The award of these contracts for KCAD and our option to invest in the rigs extends our tender barge portfolio by almost 50 per cent., without the need for further significant capital expenditure. As operator and part owner of the tender barges, both our long term income visibility and position as a leading tender barge operator will be enhanced.'
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