UMW Oil & Gas Seeks Drilling Contracts for 2 Newly Acquired Jackups
Malaysia's UMW Oil & Gas Corp. Bhd (UMWOG) purchased two jackups from China's Tianjin Haiheng Shipbuilding & Offshore Engineering Service Co., Ltd. for $434 million as it tapped part of the proceeds from the October listing on the local stock exchange Bursa Malaysia to expand its fleet, a company source told Rigzone Thursday.
The Sale and Purchase Agreement (SPA) was signed Feb. 12 between UMW Drilling 6 (L) Ltd, a unit of UMWOG's wholly owned subsidiary UMW Rig Asset (L) Ltd. and Tianjin Haiheng. The Chinese seller had placed the order for the two jackups - Haiheng 2 (375' ILC) and Haiheng 3 (375' ILC) - with China Merchants Industry Holdings (CMIH) in September 2012.
UMWOG will name the two jackups - now under construction at CMIH's wholly owned subsidiary China Merchants Heavy Industry Co., Ltd.'s shipyard in Shenzhen, China - UMW NAGA 6 and UMW NAGA 7, respectively.
The terms of payment for each jackup, which will be funded by UMWOG's recent initial public offerings and bank borrowings, are as follow:
- $1 million refundable earnest money which was paid Jan. 13
- $34 million within 7 days of signing the Agreement
- $160 million upon delivery or handover of jackup; and
- $22 million upon the jackup arriving in international waters
Meantime, UMWOG is working to secure drilling contracts for the two jackups, which are scheduled for delivery in September and December, respectively. "There is nothing firm yet," the company source told Rigzone.
The firm is confident of landing contracts for the newbuilds as there is "high demand for jackups in Malaysia and Asia-Pacific region in the coming years ... due to an increase in activities and spending for Exploration and Production in the region in 2014, with forecast increase of 6 percent worldwide and 3 percent in Asia-Pacific as reported by Barclays Research," UMWOG said in the filing on Bursa Malaysia.
UMWOG's jackup UMW NAGA 5 (400' ILC), currently under construction at Keppel FELS shipyard in Singapore, will commence work for Nido Petroleum Philippines at the Baragatan prospect in Service Contract 63 off the Philippines in June 2014 upon delivery.
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