An option has also been agreed to for the purchase of Rig 4 (L204) for US $185 million with a closing date in the first quarter of 2008 giving a gain of approximately US $25 million if the option is declared.
Malaysian-based UMW signed a contract with Standard Drilling in January 2007 where UMW bought 51% of Rig 1 (L201) for US $176 million giving a gain of approximately US $10 million in the first quarter of 2007. And, an option to buy 51% of Rig 3 (L203) in the second quarter of 2008 for US $176 million giving a gain of approximately US $8 million, if the option is declared.
Total gain for the sale of Rig 2 and 4 and the sale of 51% of Rig 1 and Rig 3 is approximately US $100 million. After having concluded these transactions Standard Drilling will own:
- 49% of UMW SD1 (Rig 1)
UMWSD1 (Rig 1) is fully financed. US $120 million is debt financed by a bank syndicate at favorable terms. It is expected that Standard 3 (Rig 3) will be financed by the same bank syndicate.
Standard Drilling will have substantial surplus cash after having completed these transactions. The Board will propose to pay back excess cash to shareholders in total approximately NOK 4 per share for the years 2007 and 2008.
Both the L202 and L204 are being built at Labroy Shipyard in Southeast Asia and are scheduled to be delivered in 2009.
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