Sevan to expand ultra-deepwater fleet

Offshore staff

ARENDAL, Norway -- Sevan Marine wants to organize its drilling activities into a new company, Sevan Drilling, in order to grow and develop its ultra-deepwater (UDW) rig business.

An initial public offering, involving a share issue of $350 million, will likely be launched next month. In connection with this, Sevan Drilling has entered into letters of intent with COSCO Shipyard in China for the building of two UDW rigs with options for a further two.

“We are experiencing continued interest in our modern UDW rigs,” said Jan Erik Tveteraas, CEO of Sevan Marine. “Independence will act as a catalyst for further growth for both the FPSO and the drilling business.”

Tveteraas, the current CEO of Sevan Marine, will assume this position at Sevan Drilling from the first day of listing, with Jon Cole, the former CEO of Scorpion Offshore, serving as chairman.

Sevan Drilling’s existing UDW fleet will comprise the Sevan Driller, operating offshore Brazil for Petrobras under a six-year fixed term charter, and Sevan Brasil, due to be delivered from the COSCO Shipyard early in 2012 This rig, too, has six-year fixed term charter with Petrobras. The charter starts during 2Q 2012. The estimated revenue back log from these long-term charter contracts was $1.9 billion as of end-2010.

The two newly-ordered rigs are scheduled to be delivered in late 2013 and 2Q 2014. These are turn-key construction contracts with an estimated all-in price of $525 million per rig, and there are options to build two additional UDW drilling rigs at the same terms.

03/25/2011

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