Paragon inks sale and leaseback deal for two Prospector jack-ups

Paragon Offshore plc, a provider of offshore drilling rigs to the oil and gas industry, announced that its subsidiaries, which were part of the company’s acquisition of Prospector Offshore Drilling S.A., have entered into a combined $300 million sale-leaseback financing facility with subsidiaries of SinoEnergy.

SinoEnergy is a private investment firm registered in the British Virgin Islands.

Net of fees and expenses, Prospector expects to receive net proceeds of approximately $292 million.

Under the terms of the agreement, Prospector will sell two heavy-duty, harsh-environment jack-up units, Prospector 1 and Prospector 5, to subsidiaries of SinoEnergy and immediately enter into a bareboat rental charter for the assets for a period of five years.

Slashed dayrates

According to Paragon, the bareboat charter fee for Prospector 1, which is under firm contract until mid-September 2016, is $71,000 per day through November 2016, after which it will be $42,000 per day for the remainder of the charter.

The bareboat charter fee for Prospector 5, which is under firm contract until mid-November 2017, is $71,000 per day through February 2018, after which it will also be reduced to $42,000 per day. The combined implied cost of borrowing is approximately 7.5%, including fees and expenses. The lease financing is non-recourse to Paragon.

“We are extremely pleased to have secured this financing on the two Prospector rigs at what we consider to be an attractive rate in this environment,” said Randall D. Stilley, President and Chief Executive Officer of Paragon.

“As a result of this financing initiative, we have increased financial flexibility and are evaluating options for the use of the proceeds, whether it be to retain the cash in order to increase our liquidity or to further strengthen the balance sheet through debt reduction.”

Paragon says that the facilities are expected to fund by early third quarter 2015.

Share this article

Follow Offshore Energy Today

Events>

<< Oct 2019 >>
MTWTFSS
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

Executive Oil Conference & Expo 2019

Executive Oil Conference and Exhibition is a unique opportunity to meet with all of the region’s…

read more >

Oil & Gas Vietnam 2019

Oil & Gas Vietnam (OGAV) 2019 is the only specialized oil & gas event in Vietnam that brings together an international congregation of both upstream and downstream oil and gas companies and also its supporting industries gathered in the heart of Vietnam’s oil and gas industry in Vung Tau, to showcase the latest developments in the oil and gas industry.

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