30.07.2019 kl 16:48 4174

Mystery seller looks to offload jack-up drilling rig fleet
Disposal said to be an opportunity to acquire assets at a discount before utilisation and rates improve

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Deloitte Touche Tohmatsu India has been appointed as the exclusive process advisor to identify any potential buyers.

The nine rigs have all been built at Singapore shipyards between 2006 and 2009 and have operational capability in up to 375 feet.

The assets are described as having a “strong operational history” of eight to 10 years with “marque clients”.

The rigs are said to be currently operating across the Middle East and Southeast Asia, but charter rates were not disclosed.

The seller’s identity has not been disclosed, but the description of the rigs matches those owned by India’s Aban Offshore, a number of offshore brokers tell TradeWinds.

“The rigs are all chartered as of today, but they are fixed at low levels – ranging from $35,7000 to $51,000 per day,” Charlie Hockless, head of VesselsValue’s Singapore office tells TradeWinds.

“The reason behind the rigs being for sale could be that the rates being achieved by the rigs barely cover OPEX, and the company could be running low on funds.”
Hockless said the jack up market has been recovering from the well documented offshore downturn with improved utilisation and day rates.

“That said, the recovery is still not quite at a rate market players hoped for,” he adds.

“Recovery rates of previous downturns in 1986, 1994, 1999, 2001 and 2008 were much quicker than the current market.

“A well-documented example of expectation can be seen in Borr Drilling, who were expecting rates of around $100,000 per day by now. The reality is that we are looking at around half of that, even for modern tonnage.”

Hockless said asset values have come down and market players have taken advantage of this by acquiring rigs at low levels.

“An example of this being the Thor (ex-Hakuryu 15), a Keppel Super B jack up built in 2019 with an order price of $240m being sold at $124m,” he said

With the downturn in the jack up market, Hockless said oil companies have a much wider pool of options of rigs to choose from.

“Premium jack ups – those built since 2000 – have benefitted, seeing utilisation increasing over standard built rigs,” he said.
“This puts Borr Drilling’s aggressive rig resale purchasing in perspective, as they have purchased eight out of the last 12 premium resale rigs.”

On the prospects for the fleet sale, Hockless said the eight Singapore built modern jack ups presents itself as an “opportunity for market players to acquire them at a discount” before utilisation and day rates pick up further.

“Despite the fact day rates are not quite where premium rig owners would want them to be, they are improving,” he said.

“Whoever acquires these rigs will need a large reserve of capital in order to cover costs until rates reach a level that premium rig owners are more accustomed to.

“Demand for rigs by the national oil companies are increasing, especially in Middle East and Malaysia (Petronas) are positive for rig operators.”

Hockless said the level of rigs contracted in the Middle East are close to peaks last seen in July 2014, while Petronas and Mexico’s PEMEX have also called for new tenders in the past few months.
Redigert 21.01.2021 kl 02:27

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