Standard Drilling gets rid of several platform suppliers

Standard Drilling has completed a sale of two of its six medium-sized platform supply vessels (PSVs) and completed a sale-leaseback deal for the FS Arendal.

Standard Drilling said on Thursday that New World Supply Ltd (NWS), where the company has ownership of 26.2%, completed the sale of its World Sapphire and World Emerald PSVs, both in lay-up in Spain since October and November 2016.

The company added that the undisclosed purchase price was fully paid for both vessels. According to the company, the transaction is done at a level that reflects significantly higher vessel value compared to Standard Drilling’s book value and acquisition price of the shares in New World Supply.

Following the transaction, NWS owns four medium-sized PSV vessels built in 2013.

FS Arendal deal

Also, Northern Supply AS (previously PSV Opportunity AS and Northern PSV AS), where Standard Drilling has ownership of 25.5%, completed a sale-leaseback contract worth $2.8 million for the FS Arendal vessel.

Northern Supply entered into a one-year bare-boat contract with two one-year options with the buyer for a null dayrate and with a 50/50 profit split at net hire between $6,700-13,100 per day.

The company received the total transaction price while the buyer is responsible for carrying out and paying for special surveys, engine overhaul, and DP 2. The cost is estimated to be around $1.4 million at the buyer’s risk.

This transaction increases the gross cash in Northern Supply with $4.2 million compared to not executing this transaction.

Martin Nes, chairman of Standard Drilling’s board, said: “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.”

After the transactions, Standard Drilling has a 100% ownership of five large-sized PSVs and 26% ownership of 12 medium sized PSVs.

The company has economic exposure in 18 PSVs in total including the sale-leaseback of FS Arendal, whereof the four medium-sized PSVs owned by NWS are considered as a financial asset.