Songa Offshore Enters Deepwater Drilling Market
Songa Offshore SE entered into an agreement with the shareholders of Deepwater Driller Ltd. to invest US $50 million in new equity into Deepwater Driller and thereby receive a 31.25% ownership in the company (the "Investment"). The Investment is Songa Offshore's first entry into the attractive deepwater drilling market.
Deepwater Driller owns a 6th generation Friede & Goldman ExD ultra-deepwater semisubmersible drilling rig (previously named Larsen Rig 1) under construction at Jurong Shipyard with scheduled delivery in April 2011. The Investment is expected to close on or about 16 April 2010, subject to inter alia satisfactory, confirmatory due diligence by Songa Offshore.
"This transaction marks a new era for Songa Offshore. We are pursuing our strategy to gradually expand into the ultra deepwater segment. Through this non-recourse, limited investment, Songa Offshore has achieved an attractive option to enter the fast growing ultra deepwater market. We were able to secure this position with only 12 months to delivery at very attractive terms," says Tom E. Jebsen, CFO.
Songa Offshore will assume building supervision and commercial management of the Rig and can leverage its existing organization and client relationships towards new contract fixtures in the deepwater segment. Songa Offshore will receive a daily contribution of US $7,500 to cover indirect costs and an incentive fee of 5.0% of the Rig's EBITDA.
Following the Investment, the market capitalization of Deepwater Driller will be US $160 million. The other shareholders in Deepwater Driller post new equity (the "Shareholders") are sub-funds of Sector Umbrella Trust managed by Sector Omega ASA (35.1%), Petrolia Invest AS (20.6%) and Pareto World Wide Offshore AS (13.1%).