McDermott International, Inc. has announced an update to certain operational matters, including Malaysia (Siakap) Project, the installation of the extended tension leg platform in Brazil (Papa Terra), Azerbaijan (COP) Project, and Australia (Ichthys) Project.
Through working capital management, the Company maintained its previously reported liquidity and leverage position at the end of March 2014 compared to amounts previously reported at the end of February 2014. Specifically, as of March 31, 2014, the Company had approximately $320 million of total cash, cash equivalents, restricted cash and investments and $307 million of total funded debt, including $250 million of borrowings under the Company’s credit facility and $57 million of separate vessel financing.
The Company recently achieved significant operational milestones on several key projects, including:
– Malaysia (Siakap) Project – Pipe and subsea structure installation has been completed. The customer received first oil in February 2014, and the vessel North Ocean 105 has demobilized from the field. The Company expects mechanical completion in early April 2014. Although this project resulted in financial losses recorded in 2013, it was a major technical achievement of complex pipe-in-pipe and subsea structure installation in over 5,000 feet of water.
– Brazil (Papa Terra) Project – The installation of the extended tension leg platform was completed in March 2014 and the vessel DB 50 has demobilized from the field. This facility is a significant operational achievement because it includes the first dry tree in deepwater Brazil.
– Azerbaijan (COP) Project – The Company has progressed work as expected and continues to expect to complete the limited remaining offshore work by mid-May 2014.
– Australia (Ichthys) Project – The Company remains on schedule for fabrication operations in the Batam, Indonesia fabrication yard and anticipates the commencement of the offshore installation operations in the third quarter of 2014. McDermott’s work has resulted in the customer recognizing us as a leader among the program contractors, and the Company expects the work on the project will be a major subsea achievement for the Company.
The Company continues to make progress with customers on commercial matters and, although the Company can provide no assurance, opportunity remains to improve the financial outcome from each of the above-mentioned projects.