KS Energy in Deal to Build New Self-Propelled Jackup

KS Energy Services Limited has established a 50:50 joint venture company with Ezra Holdings Limited to acquire and subsequently own a new self-propelled jackup. The rig, upon completion, is expected to be chartered to a Central American based national oil company for operation in the Gulf of Mexico. In addition to chartering the rig, the Group will also provide the supply of parts, equipment and other procurement services to support its subsequent operations. The rig will be constructed by a shipyard in North America.

It is envisaged that the total value of the charter as well as the management and support services is approximately US$95 million over a period of 5 years, comprising an initial term of 3 years with an option to extend for another 2 years. Unlike a conventional jackup, the self-propelled rig is can move on its own from one location to the next. This self-propulsion ability will translate into savings on valuable time and significant rig relocation costs for the end user.

The JV will have an initial paid up capital of US$1.0 million. The project costs shall be funded via a combination of equity and bank borrowings. KS Energy will play a key role in the construction of, installation, commissioning, supervision and the subsequent management of the rig. Delivery of the rig to the Gulf of Mexico is expected to take place by 3Q FY2007. At the end of the charter, the JV as owner of the rig will be able to re-deploy the asset for other operations.

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