Norway: Siem Offshore Buying More Stake in Overseas Drilling Ltd

Siem Offshore Inc. is in discussions to acquire the remaining 50% ownership interest in the shares of Overseas Drilling Ltd (“ODL”) from a subsidiary of Transocean Ltd. for USD 22.5 million.

The acquisition will be subject to a definitive purchase agreement. ODL is a debt-free company and owner of the scientific ocean drillship “JOIDES Resolution”.

ODL has a contract with the client Texas A&M Research Foundation (“TAMRF”) for the use of the “JOIDES Resolution” for the Integrated Ocean Drilling Program’s Phase II. The contract has a remaining firm period through the end of September 2013 and the contract revenue for the remaining firm period commencing 1 January 2011 is approximately USD 82 million. The client has ten additional years of options. The annual contract revenue for optional years will be approximately USD 5 million below the annual contract revenue during the firm period. The contract with ODL can be terminated by TAMRF at any time during the firm period with a USD 3 million termination fee.

The “JOIDES Resolution” commenced operations as an oil exploration drillship in the late 1970s and was converted into a scientific ocean drilling vessel in the mid-1980s. The vessel underwent a two-year modernization program at a cost of approximately USD 100 million that was completed in early 2009. The modernisation program included new accommodations and office spaces, new scientific laboratories, refurbishment of the drilling and coring equipment, refurbishment of the thrusters and propulsion system, new bridge and navigation systems, improved core handling capabilities, and structural improvements.

The “JOIDES Resolution” is one of the primary research vessels for the Integrated Ocean Drilling Program, an international research program supported by two lead agencies, the United States National Science Foundation and Japan’s Ministry of Education, Culture, Sports, Science and Technology, and by other participating international consortiums, including ECORD, the European Consortium for Ocean Research Drilling, of which Norway is a member. The vessel operates worldwide recovering core samples from the ocean floor which are analyzed onboard by a team of up to 50 scientists and technicians working 24 hours a day. The vessel is capable of operating in water depths of up to 27,000 feet.

The name “JOIDES” reflects the vessel’s mission and stands for Joint Oceanographic Institutions for Deep Earth Sampling, and “Resolution” was named after the HMS Resolution which was commanded by Capt. James Cook who explored the Pacific and Antarctic regions.

Source:Siem Offshore, March 28, 2011

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