Dolphin Drilling AS (OSE: DDRIL) has announced the acquisition of Paul B. Loyd Jr. semi-submersible rigs. and Transocean Leader for a total of $61.5 million “plus an additional $3 million.”
Semisub-sub Paul B. Loyd Jr. is currently under contract with Harbor Energy in the United Kingdom, with a firm term expected to last until September 2024, while the Transocean Leader is currently stacked in the United Kingdom, Dolphin noted in a statement posted on its website. Dolphin also disclosed that it is considering a private placement of approximately $60 million to fund the offerings.
Dolphin noted in the statement that the private placement is supported by the company’s two largest shareholders, Strategic Value Partners LLC and SD Standard ETC Plc, which it said have previously committed to subscribe for 12, 5 million and 7.5 million dollars, respectively. In addition, the companies have committed to support Dolphin Drilling through a $15 million revolving facility, and the CEO, COO, CFO and other senior members of Dolphin’s management group have committed to participate in the private placement, according to Dolphin.
In a separate statement posted on its website the same day, Dolphin said it has retained Arctic Securities AS, Clarksons Securities AS, DNB Markets, a part of DNB Bank ASA, Fearnley Securities AS and Pareto Securities AS as joint brokers to advise about and carry out a private placement of new shares.
“We are excited about this acquisition, which not only expands our fleet, but also improves our earnings visibility,” Dolphin Drilling CEO Bjørnar Iversen said in a company statement.
“This transaction represents an important step for Dolphin Drilling as we demonstrate the ability of our operating platform to incorporate additional assets and generate immediate and strong cash flows for our shareholders,” he added.
“The addition of these efficient rigs allows us to further consolidate the midwater rig segment in a shrinking market characterized by historically low supply and increasing day rates in offshore basins,” he continued.
Dolphin noted in a statement posted on its site that the deal is subject to certain customary closing conditions, which it said must be satisfied before the transaction can be completed. He added that the deal with Transocean is conditional on approval to renew Paul B. Loyd Jr.’s existing UK HSE safety case. at Dolphin Drilling.
As of this writing, Transocean has made no mention of the deal on its site.
In another statement posted on its site the same day, Dolphin announced a letter of intent for a three-year extension of the firm contract period for Paul B. Loyd Jr.
Dolphin said in that statement that it has received a commitment, subject to certain conditions, from Harbor Energy to extend the firm contract period for Paul B. Loyd Jr for an additional three years until September 2027. The total existing firm contract plus the new extended The commitment represents an estimated backlog of contracted revenue of $279 million, Dolphin noted in the statement.
Harbor Energy also maintains five more one-year options for future projects after the extension period, Dolphin noted.
The Paul B. Loyd Jr. and the Transocean Leader are classified on the Transocean site as harsh environment semi-submarines. The former has a maximum water depth of 1,969 feet and a maximum drilling depth of 20,000 feet, while the latter has a maximum water depth of 5,500 feet and a maximum drilling depth of 25,000 feet, according to the website from Transocean.
Dolphin Drilling’s fleet currently consists of Borgland Dolphin, Bideford Dolphin and Blackford Dolphin, the company’s website shows. The Borgland Dolphin has a maximum water depth of 1,476 feet and a maximum drilling depth of 27,800 feet, the Bideford Dolphin has a maximum water depth of 1,476 feet and a maximum drilling depth of 21,325 feet, and the Blackford Dolphin has a maximum water depth. 6,000 feet and a maximum drilling depth of 30,000 feet, according to the Dolphin site.
Transocean owns, or partially owns, and operates a fleet of 39 mobile offshore drilling units, consisting of 29 ultra-deepwater floaters and 10 harsh environment floaters, according to the company’s website. In addition, Transocean has a non-controlling interest in a company that is building an ultra-deepwater drillship, he adds.
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