Standard Drilling & UMW Petropipe Finalize Joint Venture
Standard Drilling ASA and UMW Petropipe entered into a letter of intent on November 8, 2006. The two parties have now signed a sale and purchase agreement and an option agreement respectively for the two rigs to be named Naga 2 (delivery September 2008) and Naga 3 (delivery July 2009). The two rigs will be owned 51% by UMW Petropipe and 49% by Standard Drilling ASA. The transaction is based on an average rig price of US $176.5 million, or US $90 million for 51% of each of the rigs.
In respect to Naga 2, UMW Petropipe pays a total price of US $42.3 million for 51% of the shares in Standard 1 Pte Ltd, a Singapore registered subsidiary of Standard Drilling ASA, where of US $33.6 million are purchase of existing shares in Standard 1 Pte Ltd from Standard Drilling ASA and US $8.7 million is in the form of subscription of new shares in Standard 1 Pte Ltd.
In respect to Naga 3, UMW Petropipe and Standard Drilling ASA have entered into an option agreement for the rig owned by Standard 3 Pte Ltd (a Singapore registered subsidiary of Standard Drilling ASA), whereby UMW Petropipe has the right to buy 51% of the equity in Standard 3 at a price of US $40.8 million by April 15, 2008 and Standard Drilling ASA has the right to require UMW Petropipe to purchase the shares at the same price at any time between April 1, 2008 and two months thereafter. If the option(s) is exercised UMW Petropipe will pay the price of US $40.8 million by way of buying existing shares in Standard 3 Pte Ltd for US $29.8 million and a directed subscription of new shares in Standard 3 Pte Ltd in the amount of US $11 million.
The chairman of Standard Drilling ASA, Mr. Oystein Spetalen comments: "The joint venture with UMW Petropipe is a milestone for Standard Drilling ASA as UMW Petropipe will strengthen Standard Drilling ASA with complementary skills and market knowledge of the important Asian drilling market. The two parties will work together to get employment for the rigs likely within the next 9-12 months. The two parties plan to build an operating and marketing organization based in Kuala Lumpur and Singapore".
CEO Jan Kildal in Standard Drilling ASA says: "After the completion of the deal with UMW and the bond loan of US $60 million placed in late December 2006, Standard Drilling has significantly strengthened the company's financial position and the company is in principle fully financed to meet all its payments for 2007".
UMW Petropipe is a subsidiary of UMW Holdings Berhad, a leading public-listed company in Malaysia with over 10,000 employees. The core business of the company include support and service for the Oil and Gas sector with presence in Malaysia, China, Thailand, India, Vietnam, Australia, Turkmenistan and Dubai. Their major clients include international oil companies, including Petronas, Malaysia's national oil company. Further, the core business of UMW Holdings Berhad is manufacture/assembly and distribution of Toyota and Perodua (collaboration with Daihatsu Motor Corporation of Japan) motor vehicles and components in Malaysia. The company also distributes Komatsu, Bomag and Case heavy equipment and Toyota forklifts in several Asian countries.
Standard Drilling ASA is listed on the OTC market in Oslo. The company has contracted 4 MSC-CJ-46100D from Labroy Shipyard in Singapore with delivery September 2008, April 2009, June 2009 and October 2009. After the transactions with UMW Petropipe, Standard Drilling ASA will own two rigs 100% and two rigs 49%.
- PCPP Nixes Drilling Contract for Naga 2 Jackup Offshore Sarawak (Jul 07)
- Standard Drilling Elects Rune Steen as New CEO in Singapore (May 27)
- UMW, Standard JV Inks 3-Year Deal with PCPP for NAGA 2's Services (Aug 12)
Company: UMW Petropipe (L) Ltd more info
- Standard Drilling & UMW Petropipe Finalize Joint Venture (Jan 23)
- Standard Drilling Extends Letter of Intent with UMW Petropipe (Dec 28)
- Standard Drilling Inks LOI with UMW Petropipe (Nov 08)