Seadrill Ltd. (NYSE: SDRL) has entered into an agreement with Seadrill Partners pursuant to which the company will sell to Seadrill Capricorn Holdings LLC, Seadrill Partners' 51% owned subsidiary, all of the ownership interests in the entities that own and operate the ultra-deepwater drillship, the West Auriga. The implied sale price of the drillship acquisition is $1.24 billion, less $443.1 million outstanding under the facility related to the West Auriga.
SDRL owns the remaining 49% interest in Capricorn Holdings. The West Auriga acquisition, which is expected to close within 30 days, will be accomplished through a series of purchases, contributions, and assumptions of debt, and is subject to the satisfaction of certain closing conditions.
The West Auriga is a sixth-generation, dynamically positioned drillship that was delivered from the Samsung shipyard to its current customer, BP, in October 2013. The West Auriga is expected to carry out operations in the US Gulf of Mexico until the end of its contract in October 2020 at a dayrate of $565,000 per day, excluding approximately $37,500 per day payable by the customer over the term of the contract relating to mobilization, variation orders, and other special and standby rates.
With regard to the drillship acquisition, Capricorn Holdings intends to issue a $100 million zero coupon limited recourse discount note to SDRL that matures in September 2015. Upon maturity of such note, Seadrill Capricorn Holdings LLC will repay $103.7 million to SDRL. Based on the Seadrill Partners' 51% ownership of Seadrill Capricorn Holdings, its portion of the net purchase price after debt will be $355.4 million.