Pan United Wins Major Refurbishment Contract

Pan-United Marine has won a major contract to re-activate yet another drillship – its third such project this year.

The contract is awarded by Frontier Drilling (Asia) Pte Ltd, for which PUM had successfully completed two re-activation projects on their drillships, Frontier Ice in 2002 and Frontier Duchess in 2004.

For the latest vessel, Frontier Discoverer, PUM will fabricate and install a new sponson tank. Other works include installation of a new accommodation block as well as refurbishment of the marine and drilling equipment to meet ice class requirements. Based on the estimated work scope to be carried out, the contract value is about S$25 million. The job is scheduled for completion by 2Q2007.

Said PUM's Executive Chairman Henry Ng: "Our third re-activation job this year is a significant contract for our repair and conversion businesses which, in 1H06, rose to 29.5% of group revenue from 24.9% in 1H05. Based on the planned schedule, we expect about 60% of the work scope to be completed in the current financial year ending 31 December 2006.

"The buoyant oil and gas market has created such demand for drillships that were previously laid up. We reckon that there are at least eight drillships that are being modified/re-activated this year and we are indeed honored to have the opportunity to undertake three of these.

"We have already completed and re-delivered the first drillship, Neptune Discoverer, last month and work is in progress for the second drillship, Neptune Explorer."

Assuming that the contract was completed in the financial year ended December 31, 2005 ("FY 2005"), the most recently completed financial year, the contract would have lifted the FY2005's Group NTA by 4% to 43.6 cents and its EPS by 1.8 cents.

In 3Q2006 to-date, besides the re-delivery of Neptune Discoverer, the Group had also completed and delivered a new AHTS vessel and a new platform supply vessel. After taking into account these projects and the work-in-progress completed to-date on the other contracts in the quarter, the Group's outstanding orderbook is now about S$455 million. It comprises mainly 18 shipbuilding contracts, re-activation of two drillships, and conversion of two general cargo vessels.

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