Standard Drilling increases fleet to 10 PSVs

S.D. Standard Drilling has made plans to buy three large Norwegian-built platform supply vessels (PSVs) on a wholly owned basis, increasing its fleet to 10 PSVs. 

The company informed on Thursday that, through wholly owned subsidiaries, it has agreed to acquire the three ST-216L CD PSVs Volstad Viking, Volstad Supplier and Volstad Princess from Volstad Shipping.

The vessels are large PSVs, all built at Aker Brattvaag, Norway in 2007-2008, with 1,060m2 deck space and equipped with ice class (ICE- 1B) capabilities. The vessels are to be acquired for a total en-bloc consideration of $40 million.

Following the acquisition, the company will control a fleet of 10 Norwegian built PSVs. To remind, earlier in January, Standard Drilling bought interest in two platform supply vessels.

Martin Nes, Chairman of the company, said: “The vessels grow our asset base and fleet significantly and are favorably priced at $13.3m per unit, representing a discount of 67% to $40.6m actual newbuild price and a discount of 47% to the 25-year current newbuild parity of a 9 year old vessel with an implied value of $25m.”

He also added: “The vessels have an impeccable operating track record and enable the company to enter the Norwegian market. With their ice class capabilities the vessels are also likely to be deployed for operations in harsh/sub-Arctic regions.”

Fletcher Shipping will act as technical and commercial manager for the vessels. The acquisition of the vessels is expected to be completed, subject to inspection, in February 2017. It will be financed through the company’s cash holding, the share contributions from the subsequent offers and (to the extent necessary) a credit facility.

In connection with the acquisition of the vessels, the company will enter into a six months revolving credit facility at market terms with Saga Tankers totaling $10 million in order to secure the company’s available liquidity reserves.

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