Vantage Drilling has signed a definitive agreement to acquire the remaining 55% ownership interest in Mandarin Drilling, a Marshall Islands corporation (Mandarin), from F3 Capital, an exempted company incorporated under the laws of the Cayman Islands for a purchase price of approximately $139.65 million. Upon closing of this transaction the Company will be responsible for funding the remaining construction-related payments for the Platinum Explorer. The closing of the acquisition is subject to a financing condition and customary closing conditions. Vantage has currently invested approximately $123 million for its initial 45% ownership stake in Mandarin in November 2008. F3 Capital is wholly-owned by Hsin-Chi Su one of the Company's directors and a significant shareholder of the Company. Mandarin's sole asset is the construction contract for the Platinum Explorer, an ultra-deepwater drillship under construction at Daewoo Shipbuilding & Marine Engineering in Okpo, Korea. Upon completion of the acquisition, the Company will be required to make further construction payments and related equipment and oversight payments aggregating approximately $650 million to complete the purchase and outfitting of the Platinum Explorer.
Paul A. Bragg, the Company's Chairman and CEO, commented, "We are excited to acquire full ownership of the Platinum Explorer as we continue to build one of the most modern and technologically advanced offshore drilling rig fleets in the world.
"As we have managed the project since inception in August 2007, we have the highest confidence in the quality of the asset we are buying. The Platinum Explorer is currently over 95% complete and is expected to be delivered in November 2010, on time and on budget."
Upon completion of construction, the Platinum Explorer is expected to be deployed to offshore India, pursuant to a five year fixed rate contract with Oil and Natural Gas Company (ONGC) at a rate of $585,000 per day. Mr. Bragg continued, "Beginning in 2011, we expect the Platinum Explorer to generate $145 to $150 million of EBITDA per year or approximately $750 million over the life of this contract. When combined with our four ultra-premium jackups currently operating, we expect that the Company will have an EBITDA run rate between $250 and $270 million per year."
Mr. Su commented, "I am pleased that Vantage is acquiring full ownership of Platinum Explorer. This is an important further step in the Company achieving its goal to be a premier offshore drilling contractor, which is our shared objective. F3, through the TMT offshore team, have incorporated many of our innovations, along with DSME, in the Platinum Explorer that make the unit best in class from a safety and efficiency perspective, for ultra-deepwater drilling. Vantage has done an excellent job ensuring construction of the unit on time and on budget, and as a major shareholder of Vantage, I believe the transaction will help drive further shareholder value as Vantage continues to grow."
The Platinum Explorer is equipped for drilling in water depths of up to 10,000 feet, with a total vertical drilling depth capacity of up to 40,000 feet. The Platinum Explorer's hull design has a variable deck load of approximately 20,000 tons and measures 781 feet long by 137 feet wide.
Most Popular Articles
From the Career Center
Jobs that may interest you