Trinidad Drilling Ltd. has entered into an agreement to sell the barge drilling rig it has been constructing in Indonesia to an international third party. The parties have agreed to a purchase price of US$53.5 million plus a handling fee for any additional modifications made. In total, Trinidad expects to receive proceeds of approximately US$54 million.
The barge rig is an internationally classed, posted drilling rig with 3,000 horse power and AC drive equipment. Trinidad has received a US$5.35 million non-refundable deposit andexpects to receive the balance of the purchase price within 90 days.
"This transaction is a good business decision for Trinidad," said Lyle Whitmarsh, President and Chief Executive Officer of Trinidad. "We have generated a strong return on the original investment we made in the barge rig and we can now redeploy those funds towards new opportunities in the land drilling and barge markets that will create additional value for our shareholders."
The proceeds from the sale of the Indonesian barge are expected to be used for general business purposes, to fund future expansion opportunities and to reduce current debt levels. We continue to see strong opportunities in both the U.S. land drilling market and the U.S. Gulf Coast barge drilling market. The newer, more efficient equipment we can provide gives a competitive advantage for Trinidad and is reflected in the high utilization rates and solid profit margins we maintain. We will continue to evaluate these opportunities, looking for those that meet our stringent criteria and add value for our shareholders."
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