First Wave/Newpark Shipbuilding has terminated its contract with Crest Hidayat Limited, a Malaysian company, due solely to the failure of Crest Hidayat Limited to meet its payment obligations under the contract and the failure of its parent corporation, Crest Petroleum Bhd, to fulfill its obligations as guarantor under the contract. Crest Petroleum has publicly reported the difficulty to be the result of the suspension of its credit sources. Crest has further advised the company that it is seeking to establish new funding for the project. The contract, announced by the company in June 2002, involved the repair and conversion of a semi-submersible drilling rig Teknik Hidayat, formerly known as Pan Producer, to a self-erecting tender-assist rig. The company discontinued all work on the project at its East Pelican Island facility in Galveston, Texas, in early December and is pursuing its remedies against Crest Hidayat Limited and Crest Petroleum.
The Company has received a commitment for funding from a major stakeholder. The substantial institutional investor has agreed to make available to the company up to $6 million in additional funding, if required. The commitment is subject to documentation and is expected to close on or before Jan. 24, 2003.
Mr. Grady Walker, president of the company stated, "This funding represents a significant vote of confidence in the company by a major stakeholder and ensures that the company's growth and development, particularly in the offshore sector, will be uninterrupted." Mr. Walker further noted, "the Teknik Hidayat is a viable tender concept, and the project, which is in an advanced state of completion, has been a technical and operational success thus far. We are disappointed in the inability of Crest to continue the project at this time."