Norwegian marine geophysical company, Petroleum Geo-Services ASA (PGS), has entered into a sale and leaseback agreement for offshore seismic vessel PGS Apollo, with Offshore Merchant Partners (OMP).
PGS said in the press release that the sale and leaseback agreement established between PGS and OMP is for a 10-year bareboat charter, with an option for a 5-year extension at a reduced rate.
According to the press release, PGS has the option to acquire the vessel after end of year 5 and 8, but no obligation. The lease will be reported as an operating lease.
In the same statement, PGS said that the company has a solid financial position with a liquidity reserve of $558.9 million as of end Q1 2015.
PGS has also said that the proceeds from the transaction amount to $80 million.
PGS Apollo, the only non-Ramform designed 3D vessel in the PGS fleet, entered the PGS fleet in 2010 following the acquisition of Arrow Seismic ASA in the second half of 2007. PGS said that the price paid for Arrow Seismic ASA reflected a strong seismic market and, as a result, the recorded value of the vessel in the PGS group accounts exceeded construction cost of the vessel. As a result of this transaction, PGS expects to record a loss on sale in Q2 2015 of $57 million.
OMP is a portfolio company of HitecVision L.P VI, which primarily targets investments in global oil & gas related offshore asset markets. According to PGS, Navis Finance acted as advisor to the transaction.