Market Recovery? Odfjell Prepares To Order Expansion Of The Fleet

- Apr 26, 2018-

The gradual stabilization of oil prices, signs of recovery in the energy industry, and some shipowners have been “just around the corner”, ready to expand the fleet while the barge price is still low.

 

Offshore drilling company Odfjell Drilling recently stated that it plans to expand its existing fleet of offshore rigs from four to six to ten. Odfjell stated that the company is discussing potential new projects with shipbuilders to further expand the fleet and compete with companies such as Transocean and Seadrill. welding overlay flange

 

On April 19, Odfjell raised 175 million U.S. dollars through the issuance of new shares, which will be used to help Odfjell acquire the "Stena Midmax" semi-submersible drilling platform built by Samsung Heavy Industries for $ 505 million. The issuance of new shares has dropped Odfjell's share price by 10%.

 

Akastor, an investment company of Norwegian billionaire Kjell Inge Roekke, also plans to invest $75 million to fund Odfjell's acquisition of the "Stena Midmax". slip on flange

 

Leif Borge, Akastor’s chief financial officer, said: “Financially speaking, this is a very attractive transaction and the return on investment for the next six years will reach 12% to 20%.” He added that the company hopes to establish more with Odfjell. close relationship.

 

Overall, Odfjell plans to raise 618 million U.S. dollars, including 325 million U.S. dollars of bank guarantee debt, to pay for drilling platform deliveries, upgrades, project supervision, and working capital.

 

Four modern semi-submersible drilling platforms of Odfjell's fleet are currently operating in the North Sea and are suitable for harsh environment operations. They have signed long-term chartered contracts with BP, Norwegian State Oil and Aker BP. butt weld elbows

 

According to Odfjell, the North Sea market has the fastest growing demand for floating drilling platforms for harsh environments. In 2018, the fleet utilization rate has increased to more than 90%. In general, when the utilization rate of the offshore rig fleet exceeds 85%, the drilling company can request higher daily rent from the oil company.

 

In order to finance the new drilling rig, Odfjell issued 38 million new shares on April 19 at a price of 36 NOK per share (US$4.61). The company also stated that it plans to sell 4.3 million shares to other shareholders at the same price to achieve an initial target of 1.56 billion Norwegian kroner.