Standard Drilling Announces Sale of Two PSVs

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(Image Courtesy: Offshore Support Journal)

New World Supply Ltd, where SDSD has an ownership of 26.2%, has completed a sale of two of its six medium sized platform supply vessels (PSVs). The vessels, “World Sapphire” and “World Emerald”, have been in lay-up in Spain since October and November 2016.

The purchase price, which remains confidential, has been fully paid for both vessels. The transaction is done at a level that reflect significantly higher vessel value compared to SDSD’s book value and acquisition price of the shares in New World Supply Ltd. As previously stated, SDSD consider its holding in NWS as a financial investment.

Following the above mentioned transaction, NWS owns four medium sized PSV vessels built in 2013. Northern Supply AS (previously PSV Opportunity AS and Northern PSV AS), where SDSD has an ownership of 25.5%, has completed a sale- lease back contract for FS Arendal (2006). FS Arendal was sold for USDm 2.8. Northern Supply AS has entered into a one year bare-boat contract (1+1 year option) with the buyer at day rate USD 0 per day and with a 50/50 profit split at net hire between GBP 5100-10 000 per day.

Northern Supply AS has received the total transaction price. The buyer is responsible to carry out and pay for Special Survey/Engine overhaul/DP 2, a cost estimated to be approximately USDm 1.4 (at buyers risk). This transaction increases the gross cash in Northern Supply AS with USDm 4.2 compared to not executing this transaction.

“These transactions are in line with our expectations of an increase in the value of our assets. In addition, these transactions strengthen the cash position in the company structure, still with no debt, and further enables Standard Drilling to pursue other attractive opportunities within the market the Company operates” says Martin Nes, Chairman of the Board in SDSD.

After the transactions SDSD has a 100% ownership of five large sized PSV’s and ~26% ownership of 12 medium sized PSV’s. Further SDSD has economic exposure in 18 PSVs in total (including the sale-lease back of FS Arendal), where of the 4 medium sized PSV’s owned by NWS are considered as a financial asset. SDSD has no debt.

Sea News, October 19

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