Fredriksen’s Northern Drilling to buy two new drillships with option for third

A Vantage drillship

John Frederiksen’s Northern Drilling has entered into agreements to buy two newbuild drillships from a South Korean shipyard with an option to buy a third drillship. 

Northern Drilling said on Tuesday that the two newbuilding 7th generation DP3 and ultra-deepwater capable drillships, known as the West Aquila and the West Libra, will be bought from South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME).

Norwegian billionaire John Fredriksen’s other offshore drilling company, Seadrill, is the previous owner of the two new drillships. The struggling driller in 2016 postponed the deliveries of the two rigs for the second quarter of 2018 and first quarter of 2019 only to cancel the orders in March 2018.

It is worth mentioning that Seadrill has been going through a financial restructuring process since last September affected by oil crisis which brought down rig demand. In addition to support by the company’s creditors and shareholders, Seadrill’s reorganization plan was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas in April.

Northern Drilling will pay the shipyard $296 million per unit, whereby $90 million (per unit) will be paid at contract signing and the remaining at delivery. Expected delivery is January and March 2021, with flexible delivery schedule and option to take earlier delivery.

 

Option for third 

 

In addition, the company has received an option to acquire a third drillship, known as the Cobalt Explorer, from DSME at a purchase price of $350 million with the option period expiring in six months. The right to exercise the option is subject to a defined, unaffiliated, third party not exercising a senior priority purchase right over the drillship at $405 million during the option period.

The Cobalt Explorer had been ordered from DSME by Vantage Drilling and cancelled in August 2015.

Northern Drilling, a newcomer in the offshore drilling market, has already bought two other rigs in a similar transaction as the one being done now.

Namely, the driller bought the West Mira semi-submersible rig from Hyundai Heavy Industries after Seadrill had cancelled the contract due to the yard’s inability to deliver the rig on time. Northern also bought the Bollsta Dolphin semi-submersible from Hyundai last December. The original client for the rig, Fred. Olsen Energy, cancelled the order in 2015 as a result of the delays in delivery date.

 

Funding the purchase

 

In connection with the acquisition of the two drillships from DSME, Northern Drilling said on Tuesday it was contemplating a private placement of new shares for gross proceeds of NOK 2,026,800,000 (approximately $250 million).

The private placement is directed towards investors subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements. The net proceeds from the private placement will be used to partially fund installments on the acquired drilling units and for general corporate purposes.

The company offered 29,805,883 offer shares at a subscription price per offer share of NOK 68. The application period for the private placement started on Tuesday, May 8 at 16:30 (CET) and will close on Wednesday, May 9 at 08:00 (CET).

The minimum order size and allocation in the private placement is the NOK equivalent of EUR 100,000, provided that the company may, at its sole discretion, offer and allocate an amount below EUR 100,000, pursuant to any applicable exemptions from the prospectus requirement being available.

The company’s largest shareholder, Hemen Holding, a company indirectly controlled by trusts established by John Fredriksen for the benefit of his immediate family, has pre subscribed for and will be allocated offer shares for an aggregate amount of approximately NOK 608,040,000 ($75 million) in the private placement.

Offshore Energy Today Staff

Share this article

Follow Offshore Energy Today

Events>

<< Dec 2018 >>
MTWTFSS
26 27 28 29 30 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31 1 2 3 4 5 6

Fuel Cell Expo 2019

FC EXPO is world’s largest show for hydrogen & fuel cell…

read more >

LNG Bunkering Summit 2019

LNG Bunkering Summit will cover the obstacles facing both the shipping and port communities…

read more >

Egypt Petroleum Show

This event will feature 500+ regional & international exhibiting companies from over 35 countries…

read more >

IoT in Oil & Gas 2019

The IoT in Oil & Gas 2019 Conference will continue to focus on helping operators…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply